On the Relative Efficiency of Cash Transfers and Subsidies
AbstractThis paper considers the relative efficiency of cash grants and subsidies when society's goal is to raise the welfare of a household. When the head of the household makes all consumption decisions, a principal-agent problem is created: the head acts as the agent of the government in allocating the transferred resources. Subsidies to commodities with particular characteristics may be a more efficient way to guarantee that benefits are shared within the household. Though related to the old notion of paternalism, this theory leads to more specific predictions regarding the kinds of commodities that can be efficiently subsidized. Copyright 1991 by Oxford University Press.
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Bibliographic InfoArticle provided by Western Economic Association International in its journal Economic Inquiry.
Volume (Year): 29 (1991)
Issue (Month): 3 (July)
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Other versions of this item:
- Tom Ross, 1988. "On The Relative Efficiency Of Cash Transfers And Subsidies," Carleton Industrial Organization Research Unit (CIORU) 88-04, Carleton University, Department of Economics.
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- Kazianga, Harounan & de Walque, Damien & Alderman, Harold, 2009.
"Educational and health impacts of two school feeding schemes : evidence from a randomized trial in rural Burkina Faso,"
Policy Research Working Paper Series
4976, The World Bank.
- Harounan Kazianga & Damien de Walque & Harold Alderman, 2009. "Educational and Health Impacts of Two School Feeding Schemes: Evidence from a Randomized Trial in Rural Burkina Faso," Economics Working Paper Series 0904, Oklahoma State University, Department of Economics and Legal Studies in Business.
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