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Do Consumer Price Subsidies Really Improve Nutrition?

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Author Info

  • Robert T. Jensen

    (UCLA School of Public Affairs, Watson Institute for International Studies, Brown University, and NBER)

  • Nolan H. Miller

    (University of Illinois at Urbana-Champaign and NBER)

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    Abstract

    Many developing countries use food-price subsidies or controls to improve nutrition. However, subsidizing goods on which households spend a high proportion of their budget can create large wealth effects. Consumers may then substitute toward foods with higher nonnutritional attributes (such as taste) but lower nutritional content per unit of currency, weakening or perhaps even reversing the subsidy's intended impact. We analyze data from a randomized program of large price subsidies for poor households in two provinces of China and find no evidence that the subsidies improved nutrition. In fact, they may have had a negative impact for some households. © 2011 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

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    Bibliographic Info

    Article provided by MIT Press in its journal Review of Economics and Statistics.

    Volume (Year): 93 (2011)
    Issue (Month): 4 (November)
    Pages: 1205-1223

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    Handle: RePEc:tpr:restat:v:93:y:2011:i:4:p:1205-1223

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    Web page: http://mitpress.mit.edu/journals/

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    Cited by:
    1. Neeraj Kaushal & Felix Muchomba, 2013. "How Consumer Price Subsidies affect Nutrition," NBER Working Papers 19404, National Bureau of Economic Research, Inc.
    2. Kym Anderson & Anna Strutt, 2014. "Food security policy options for China: lessons from other countries," Departmental Working Papers 2014-11, The Australian National University, Arndt-Corden Department of Economics.
    3. Bhagowalia, Priya & Headey, Derek D. & Kadiyala, Suneetha, 2012. "Agriculture, Income, and Nutrition Linkages in India: Insights from a Nationally Representative Survey:," IFPRI discussion papers 1195, International Food Policy Research Institute (IFPRI).

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