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

  • Bhaskar Dutta
  • Bharat Ramaswami

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. Copyright Blackwell Publishing Ltd 2004..

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Article provided by Wiley Blackwell in its journal Review of Development Economics.

Volume (Year): 8 (2004)
Issue (Month): 2 (05)
Pages: 309-324

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Handle: RePEc:bla:rdevec:v:8:y:2004:i:2:p:309-324
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  1. Alderman, Harold & Lindert, Kathy, 1998. "The Potential and Limitations of Self-Targeted Food Subsidies," World Bank Research Observer, World Bank Group, vol. 13(2), pages 213-29, August.
  2. Lipton, Michael & Ravallion, Martin, 1993. "Poverty and policy," Policy Research Working Paper Series 1130, The World Bank.
  3. Besley, Timothy & Kanbur, Ravi, 1990. "The principles of targeting," Policy Research Working Paper Series 385, The World Bank.
  4. Ahluwalia, Deepak, 1993. "Public distribution of food in India : Coverage, targeting and leakages," Food Policy, Elsevier, vol. 18(1), pages 33-54, February.
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