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Reforming Food Subsidy Schemes: Estimating the Gains from Self‐targeting in India

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  • Bhaskar Dutta
  • Bharat Ramaswami

Abstract

The paper uses the theoretical framework of the theory of tax reform to analyze whether a “small” change in an existing food subsidy program can be both 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 is used to estimate welfare changes from shifting a rupee of subsidy on existing commodities to coarse cereals in the Indian public distribution system.

Suggested Citation

  • Bhaskar Dutta & Bharat Ramaswami, 2004. "Reforming Food Subsidy Schemes: Estimating the Gains from Self‐targeting in India," Review of Development Economics, Wiley Blackwell, vol. 8(2), pages 309-324, May.
    • Handle: RePEc:bla:rdevec:v:8:y:2004:i:2:p:309-324
    DOI: 10.1111/j.1467-9361.2004.00235.x
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    References listed on IDEAS

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    1. Giovanni Andrea Cornia & Frances Stewart, 1993. "Two errors of targeting," Journal of International Development, John Wiley & Sons, Ltd., vol. 5(5), pages 459-496, September.
      • Giovanni Andrea Cornia & Frances Stewart, 1993. "Two Errors of Targeting," Papers iopeps93/54, Innocenti Occasional Papers, Economic Policy Series.
    2. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    3. Ahluwalia, Deepak, 1993. "Public distribution of food in India : Coverage, targeting and leakages," Food Policy, Elsevier, vol. 18(1), pages 33-54, February.
    4. Alderman, Harold & Lindert, Kathy, 1998. "The Potential and Limitations of Self-Targeted Food Subsidies," The World Bank Research Observer, World Bank, vol. 13(2), pages 213-229, August.
    5. Deaton,Angus & Muellbauer,John, 1980. "Economics and Consumer Behavior," Cambridge Books, Cambridge University Press, number 9780521296762, October.
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    Citations

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    Cited by:

    1. Achintya Ray, 2006. "A Class of Decomposable Poverty Measures With Public Transfers," Economics Bulletin, AccessEcon, vol. 9(3), pages 1-8.
    2. Hamidreza Izadi & Mojtaba Mohammadnejadi Moodi & Morteza Sayareh, 2023. "Investigating the role of ranking household expenditures to reform the subsidies payment system as an economic policy for Iran," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(1), pages 177-186, January.
    3. Neha Gupta, 2013. "Government Intervention In Grain Markets In India--Rethinking The Procurement Policy," Working papers 231, Centre for Development Economics, Delhi School of Economics.
    4. Anders Kjelsrud & Rohini Somanathan, 2017. "Poverty Targeting Through Public Goods," Working papers 271, Centre for Development Economics, Delhi School of Economics.
    5. Gharibnavaz, Mohammad Reza & Waschik, Robert, 2015. "Food and energy subsidy reforms in Iran: A general equilibrium analysis," Journal of Policy Modeling, Elsevier, vol. 37(5), pages 726-741.
    6. Andaleeb Rahman, 2014. "Revival of rural PDS: Expansion and outreach," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2014-012, Indira Gandhi Institute of Development Research, Mumbai, India.
    7. Andaleeb Rahman, 2014. "Revival of Rural PDS: Expansion and Outreach," Working Papers id:5796, eSocialSciences.
    8. repec:ebl:ecbull:v:9:y:2006:i:3:p:1-8 is not listed on IDEAS
    9. Karami, Ayatollah & Esmaeili, Abdoulkarim & Najafi, Bahadin, 2012. "Assessing effects of alternative food subsidy reform in Iran," Journal of Policy Modeling, Elsevier, vol. 34(5), pages 788-799.

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    More about this item

    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; Animal Welfare Policy

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