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Deadweight Losses or Gains from In-kind Transfers? Experimental Evidence from India

Author

Listed:
  • Klaus Abbink

    (Department of Economics, Monash University)

  • Gaurav Datt

    (Centre for Development Economics and Sustainability, Monash University,)

  • Lata Gangadharan

    (Department of Economics, Monash University)

  • Digvijay Negi

    (Indira Gandhi Institute of Development Research, India)

  • Bharat Ramaswami

    (Ashoka University, India.)

Abstract

Are in-kind transfers associated with deadweight losses? To answer this, we conducted an incentivized field experiment in India, which offered low-income households the choice between a free quantity of rice and varying amounts of cash to elicit their willingness to pay for rice. Contrary to expectation, we find evidence of deadweight gain on average, though with a striking contrast between a deadweight loss among respondents from female-headed households and a deadweight gain among respondents from male-headed households. Our results highlight the role of gender differences in bargaining power in shaping the choice between cash or rice.

Suggested Citation

  • Klaus Abbink & Gaurav Datt & Lata Gangadharan & Digvijay Negi & Bharat Ramaswami, 2022. "Deadweight Losses or Gains from In-kind Transfers? Experimental Evidence from India," Monash Economics Working Papers 2022-10, Monash University, Department of Economics.
    • Handle: RePEc:mos:moswps:2022-10
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    References listed on IDEAS

    as
    1. Jesse M Cunha & Giacomo De Giorgi & Seema Jayachandran, 2019. "The Price Effects of Cash Versus In-Kind Transfers," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 86(1), pages 240-281.
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    More about this item

    Keywords

    deadweight loss; in-kind transfer; cash transfer; food subsidy; field experiment;
    All these keywords.

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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