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

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  • Nicholas Li

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. I leverage the expansion of India’s Public Distribution system between 1993-2009 as a natural experiment generating variation in the quantity and value of staple grains transferred to households and districts. I find that larger PDS quantities are associated with modest decreases in staple production and farming and modest increases in market/ comparative advantage oriented specialization. The effects are larger for households and districts with higher market transaction costs or less market-oriented agriculture.

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  • Nicholas Li, 2021. "In-kind transfers, marketization costs and household specialization: Evidence from Indian farmers," Working Papers tecipa-700, University of Toronto, Department of Economics.
  • Handle: RePEc:tor:tecipa:tecipa-700
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    More about this item

    Keywords

    agriculture; production; India; food; Public Distribution System; in-kind transfers;
    All these keywords.

    JEL classification:

    • O20 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - General
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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