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In-Kind Transfers as Insurance

Author

Listed:
  • Lucie Gadenne
  • Samuel Norris
  • Monica Singhal
  • Sandip Sukhtankar

Abstract

Households in developing countries often face variation in the prices of consumption goods. We develop a model demonstrating that in-kind transfers will provide insurance benefits against price risk if the covariance between the marginal utility of income and price is positive. Using calorie shortfalls as a proxy for marginal utility, we find that this condition holds for low-income Indian households. Expansions in India's flagship in-kind food transfer program not only increase caloric intake but also reduce caloric sensitivity to prices. Our results contribute to ongoing debates about the optimal form of social protection programs.

Suggested Citation

  • Lucie Gadenne & Samuel Norris & Monica Singhal & Sandip Sukhtankar, 2024. "In-Kind Transfers as Insurance," American Economic Review, American Economic Association, vol. 114(9), pages 2861-2897, September.
    • Handle: RePEc:aea:aecrev:v:114:y:2024:i:9:p:2861-97
    DOI: 10.1257/aer.20220822
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    2. Tagliati, Federico, 2022. "Welfare effects of an in-kind transfer program: Evidence from Mexico," Journal of Development Economics, Elsevier, vol. 154(C).
    3. Sandro Ambuehl & B. Douglas Bernheim & Tony Q. Fan & Zach Freitas-Groff, 2025. "Interventionist preferences and the welfare state: the case of in-kind aid," ECON - Working Papers 471, Department of Economics - University of Zurich.
    4. Nicholas Li, 2021. "In-kind transfers, marketization costs and household specialization: Evidence from Indian farmers," Working Papers tecipa-700, University of Toronto, Department of Economics.
    5. Digvijay S. Negi, 2024. "State Mediated Trade, Distortions and Air Pollution," Working Papers 129, Ashoka University, Department of Economics.
    6. Peter Levell & Martin O'Connell & Kate Smith, 2025. "The welfare effects of price shocks and household relief packages: evidence from an energy crisis," IFS Working Papers W25/03, Institute for Fiscal Studies.
    7. Marina Mastrorillo & Antonio Scognamillo & Camille Ginet & Rebecca Pietrelli & Marco D’Errico & Adriana Ignaciuk, 2024. "Is the self-reliance strategy sustainable? Evidence from assistance programmes to refugees in Uganda," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 16(6), pages 1587-1617, December.
    8. Berkouwer, Susanna B. & Biscaye, Pierre E. & Puller, Steven & Wolfram, Catherine D., 2022. "Disbursing emergency relief through utilities: Evidence from Ghana," Journal of Development Economics, Elsevier, vol. 156(C).
    9. Negi, Digvijay S., 2022. "Global food price surge, in-kind transfers and household welfare: Evidence from India," World Development, Elsevier, vol. 158(C).
    10. Berkouwer, Susanna & Biscaye, Pierre & Hsu, Eric & Kim, Oliver & Lee, Kenneth & Miguel, Edward & Wolfram, Catherine, 2023. "Money or Power? Choosing Covid-19 aid in Kenya," Energy Economics, Elsevier, vol. 127(PB).
    11. Susanna B. Berkouwer & Pierre E. Biscaye & Eric Hsu & Oliver W. Kim & Kenneth Lee & Edward Miguel & Catherine Wolfram, 2021. "Money or Power? Financial Infrastructure and Optimal Policy," NBER Working Papers 29086, National Bureau of Economic Research, Inc.
    12. Akanksha Negi & Digvijay S. Negi, 2024. "Difference-in-Differences with a Misclassified Treatment," Working Papers 121, Ashoka University, Department of Economics.
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    14. Mastrorillo, Marina & Scognamillo, Antonio & Ginet, Camille & Pietrelli, Rebecca & d’Errico, Marco & Ignaciuk, Adriana, 2022. "Enhancing refugees’ self-reliance in Uganda – The role of cash and food assistance," ESA Working Papers 324702, Food and Agriculture Organization of the United Nations, Agricultural Development Economics Division (ESA).

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    More about this item

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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