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In-kind transfers, marketization costs and household specialization: Evidence from Indian farmers

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  • Nicholas Li

    (Department of Economics, Ryerson University, Toronto, Canada)

Abstract

I examine the effect of in-kind staple transfers on agricultural production in a setting where transactions with markets are costly for households and result in interlinked consumption and production decisions. The expansion of India’s Public Distribution system between 1993-2009 led to large variation in the quantity and value of staple grain transfers across households, districts and states. I find that increases in PDS quantities crowds out consumption from home production, decreases staple production, and leads to more market exchange oriented production. Effects are larger for households and districts that initially face higher market transaction costs or have less market-oriented production.

Suggested Citation

  • Nicholas Li, 2022. "In-kind transfers, marketization costs and household specialization: Evidence from Indian farmers," Working Papers 082, Toronto Metropolitan University, Department of Economics.
    • Handle: RePEc:rye:wpaper:wp082
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    More about this item

    Keywords

    in-kind; transfers; food; agriculture; specialization; trade; production; household; India;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs

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