Do Consumer Price Subsidies Really Improve Nutrition?
AbstractMany developing countries use food price subsidies or price controls to improve the nutrition of the poor. However, subsidizing goods on which households spend a high proportion of their budget can create large wealth effects. Consumers may then substitute towards foods with higher non-nutritional attributes like taste, but lower nutritional content per unit currency, weakening or perhaps even reversing the intended impact of the subsidy. We present data from a randomized program of large price subsidies for poor households in two provinces of China. We find that the nutritional impact caused by the subsidy was at best extremely small, and for some households actually negative.
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Bibliographic InfoPaper provided by Harvard University, John F. Kennedy School of Government in its series Working Paper Series with number rwp08-025.
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- I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
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