How Consumer Price Subsidies affect Nutrition
AbstractWe study the effect on nutrition of an exogenous increase in food grain subsidy in rural India resulting from a program targeting the poor. Our analysis suggests that increase in income resulting from the food price subsidy changed consumption patterns in favor of the subsidized grains and certain more expensive sources of calorie, and lowered consumption of coarse grains that are cheaper, yet taste-wise, inferior sources of nutrition, but had no effect on calorie, protein and fat intake in poor households. Further, our analysis shows that households allocated some of the increase in income from food price subsidy to expenditures on non-food items. Estimates of the price effect of food price subsidy on the three measures of nutrition are also negligible. We find evidence that the decline in the price of wheat and rice, changed consumption patterns toward increased consumption of wheat and rice and lower consumption of coarse grains, the unsubsidized staple food. Our analysis thus suggests that food price subsidies are likely to affect agriculture markets without impacting nutrition.
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Date of creation: Sep 2013
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Find related papers by JEL classification:
- I10 - Health, Education, and Welfare - - Health - - - General
- I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
- I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
This paper has been announced in the following NEP Reports:
- NEP-AGR-2013-09-26 (Agricultural Economics)
- NEP-ALL-2013-09-26 (All new papers)
- NEP-DEV-2013-09-26 (Development)
- NEP-HEA-2013-09-26 (Health Economics)
- NEP-REG-2013-09-26 (Regulation)
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