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 (e.g., taste), but lower nutritional content per unit of currency, weakening or perhaps even reversing the intended impact of the subsidy. 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, it may have had a negative impact for some households.
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Date of creation: Jun 2010
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Note: AG HC
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Find related papers by JEL classification:
- I38 - Health, Education, and Welfare - - Welfare and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
- Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
This paper has been announced in the following NEP Reports:
- NEP-AGR-2010-06-26 (Agricultural Economics)
- NEP-ALL-2010-06-26 (All new papers)
- NEP-MKT-2010-06-26 (Marketing)
- NEP-REG-2010-06-26 (Regulation)
- NEP-TRA-2010-06-26 (Transition Economics)
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