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Do Consumer Price Subsidies Really Improve Nutrition?

Author

Listed:
  • Robert T. Jensen

    (UCLA School of Public Affairs, Watson Institute for International Studies, Brown University, and NBER)

  • Nolan H. Miller

    (University of Illinois at Urbana-Champaign and NBER)

Abstract

Many developing countries use food-price subsidies or controls to improve nutrition. However, subsidizing goods on which households spend a high proportion of their budget can create large wealth effects. Consumers may then substitute toward foods with higher nonnutritional attributes (such as taste) but lower nutritional content per unit of currency, weakening or perhaps even reversing the subsidy's intended impact. 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, they may have had a negative impact for some households. © 2011 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Suggested Citation

  • Robert T. Jensen & Nolan H. Miller, 2011. "Do Consumer Price Subsidies Really Improve Nutrition?," The Review of Economics and Statistics, MIT Press, vol. 93(4), pages 1205-1223, November.
  • Handle: RePEc:tpr:restat:v:93:y:2011:i:4:p:1205-1223
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    Citations

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    Cited by:

    1. Anderson, Kym & Strutt, Anna, 2014. "Food security policy options for China: Lessons from other countries," Food Policy, Elsevier, vol. 49(P1), pages 50-58.
    2. Simrit Kaur, 2014. "Food entitlements, subsidies and right to food: a South Asian perspective," Chapters,in: Handbook on Food, chapter 19, pages 482-514 Edward Elgar Publishing.
    3. Robert T. Jensen, 2010. "Information, efficiency, and welfare in agricultural markets," Agricultural Economics, International Association of Agricultural Economists, vol. 41(s1), pages 203-216, November.
    4. Neeraj Kaushal & Felix Muchomba, 2013. "How Consumer Price Subsidies affect Nutrition," NBER Working Papers 19404, National Bureau of Economic Research, Inc.
    5. Andaleeb Rahman, 2015. "Universal food security program and nutritional intake: Evidence from the hunger prone KBK districts in Odisha," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2015-015, Indira Gandhi Institute of Development Research, Mumbai, India.
    6. Kaushal, Neeraj & Muchomba, Felix M., 2015. "How Consumer Price Subsidies affect Nutrition," World Development, Elsevier, vol. 74(C), pages 25-42.
    7. Rahman, Andaleeb, 2016. "Universal food security program and nutritional intake: Evidence from the hunger prone KBK districts in Odisha," Food Policy, Elsevier, vol. 63(C), pages 73-86.
    8. Lovo, Stefania & Veronesi, Marcella, 2014. "Crop Diversification and Child Health: Empirical Evidence From Tanzania," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182735, European Association of Agricultural Economists.
    9. De Zhou & Xiaohua Yu, 2015. "Calorie Elasticities with Income Dynamics: Evidence from the Literature," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 37(4), pages 575-601.
    10. Anderson, Kym & Wittwer, Glyn, 2015. "Asia's evolving role in global wine markets," China Economic Review, Elsevier, vol. 35(C), pages 1-14.
    11. Kishore, Avinash & Chakrabarti, Suman, 2015. "Is more inclusive more effective? The “new-style†public distribution system in India:," IFPRI discussion papers 1421, International Food Policy Research Institute (IFPRI).
    12. Peters, Jörg & Langbein, Jörg & Roberts, Gareth, 2017. "Generalization in the Tropics: Development policy, randomized controlled trials, and external validity," Ruhr Economic Papers 716, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    13. Andaleeb Rahman, 2015. "Universal Food Security Program and Nutritional Intake: Evidence from the Hunger Prone KBK Districts in Odisha," Working Papers id:6925, eSocialSciences.
    14. Beegle, Kathleen & Galasso, Emanuela & Goldberg, Jessica, 2017. "Direct and indirect effects of Malawi's public works program on food security," Journal of Development Economics, Elsevier, vol. 128(C), pages 1-23.
    15. Bhagowalia, Priya & Headey, Derek D. & Kadiyala, Suneetha, 2012. "Agriculture, Income, and Nutrition Linkages in India: Insights from a Nationally Representative Survey:," IFPRI discussion papers 1195, International Food Policy Research Institute (IFPRI).
    16. Patricia C Melo & Yakubu Abdul-Salam & Deborah Roberts & Alana Gilbert & Robin Matthews & Liesbeth Colen & Sergio Gomez Y Paloma, 2015. "Income Elasticities of Food Demand in Africa: A Meta-Analysis," JRC Working Papers JRC98812, Joint Research Centre (Seville site).
    17. Chakrabarti, Suman & Avinash, Kishore & Devesh, Roy, 2016. "Effectiveness of Food Subsidies in Raising Healthy Food Consumption: Public Distribution of Pulses in India," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 235649, Agricultural and Applied Economics Association.
    18. Kishore, Avinash & Chakrabarti, Suman, 2015. "Is more inclusive more effective? The ‘New Style’ public distribution system in India," Food Policy, Elsevier, vol. 55(C), pages 117-130.
    19. Basu, Karna & Wong, Maisy, 2015. "Evaluating seasonal food storage and credit programs in east Indonesia," Journal of Development Economics, Elsevier, vol. 115(C), pages 200-216.

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