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Reforming food subsidy scheme: Estimating the gains from self-targetting in India

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Author Info
Bhaskar Dutta (Indian Statistical Institute, New Delhi)
Bharat Ramaswami () (Indian Statistical Institute, New Delhi)

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Abstract

This paper uses the theoretical framework of the theory of tax reform to analyse whether a "small" change in an existing food subsidy program can be welfare-improving and revenue-neutral. It shows how existing econometric methods can be adapted to estimate demand parameters even when household level data exhibit little price variation because the government controls food prices. The methodology developed here is used to estimate welfare changes from shifting a rupee of subsidy on existing commodities to coarse cereals in the Indian public distribution system.

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Publisher Info
Paper provided by Indian Statistical Institute, New Delhi, India in its series Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers with number 02-09.

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Length: 30 pages
Date of creation: Sep 2002
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Handle: RePEc:ind:isipdp:02-09

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Find related papers by JEL classification:
H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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  1. Besley, Timothy & Kanbur, Ravi, 1990. "The principles of targeting," Policy Research Working Paper Series 385, The World Bank. [Downloadable!]
  2. Lipton, Michael & Ravallion, Martin, 1995. "Poverty and policy," Handbook of Development Economics, in: Hollis Chenery† & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 3, chapter 41, pages 2551-2657 Elsevier. [Downloadable!] (restricted)
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  3. Alderman, Harold & Lindert, Kathy, 1998. "The Potential and Limitations of Self-Targeted Food Subsidies," World Bank Research Observer, Oxford University Press, vol. 13(2), pages 213-29, August. [Downloadable!]
  4. Ahluwalia, Deepak, 1993. "Public distribution of food in India : Coverage, targeting and leakages," Food Policy, Elsevier, vol. 18(1), pages 33-54, February. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Achintya Ray, 2006. "A Class of Decomposable Poverty Measures With Public Transfers," Economics Bulletin, Economics Bulletin, vol. 9(3), pages 1-8. [Downloadable!]
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