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Can Targeted Food Programs Improve Nutrition? An Empirical Analysis of India's Public Distribution System

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  • Kochar, Anjini
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    Abstract

    Despite the widespread belief that a substantial assault on poverty requires targeting scarce resources toward the poor, practitioners frequently claim that targeted programs deliver fewer benefits to poor households than do universal programs. This article evaluates this concern through an analysis of India's targeted food distribution program, the Public Distribution System. It first examines the case for targeting by assessing the responsiveness of caloric intake to the amount of the food grain subsidy; a low elasticity suggests that improvements in nutrition may require large subsidies and, hence, a targeted program. It then examines whether targeting adversely affects the probability of poor households participating in the program. The empirical analysis identifies the effect of the program by combining time-varying policy changes in the value of the program with cross-sectional variation in program benefits generated by variation in market prices. The results confirm the low responsiveness of caloric intake to food grain subsidies and hence suggest the need for a relatively generous program. However, I also find that, under the current design of the program, targeting reduces the probability of participation by poor households, relative to a universal program.

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    Bibliographic Info

    Article provided by University of Chicago Press in its journal Economic Development and Cultural Change.

    Volume (Year): 54 (2005)
    Issue (Month): 1 (October)
    Pages: 203-35

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    Handle: RePEc:ucp:ecdecc:y:2005:v:54:i:1:p:203-35

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    Web page: http://www.journals.uchicago.edu/EDCC/

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    Cited by:
    1. Deininger, Klaus W. & Liu, Yanyan, 2008. "Economic and Social Impacts of Self-Help Groups in India," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6482, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Jensen, Robert T. & Miller, Nolan, 2008. "Do Consumer Price Subsidies Really Improve Nutrition?," Working Paper Series rwp08-025, Harvard University, John F. Kennedy School of Government.
    3. Neeraj Kaushal & Felix Muchomba, 2013. "How Consumer Price Subsidies affect Nutrition," NBER Working Papers 19404, National Bureau of Economic Research, Inc.
    4. Deininger, Klaus & Liu, Yanyan, 2013. "Economic and Social Impacts of an Innovative Self-Help Group Model in India," World Development, Elsevier, vol. 43(C), pages 149-163.
    5. Deolalikar, Anil B. & Jamison, Dean T. & Laxminarayan, Ramanan, 2007. "India's Health Initiative: Financing Issues and Options," Discussion Papers dp-07-48, Resources For the Future.
    6. Deininger, Klaus & Liu, Yanyan, 2009. "Longer-term economic impacts of self-help groups in india," Policy Research Working Paper Series 4886, The World Bank.
    7. Jha, Raghbendra & Gaiha, Raghav & Pandey, Manoj K. & Kaicker, Nidhi, 2013. "Food subsidy, income transfer and the poor: A comparative analysis of the public distribution system in India's states," Journal of Policy Modeling, Elsevier, vol. 35(6), pages 887-908.

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