In-Kind Transfers as Insurance

Lucie Gadenne, Sam Norris, Monica Singhal and Sandip Sukhtankar

No 15844, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: In-kind transfers can provide insurance benefits when prices of consumption goods vary, as is common in developing countries. We develop a model demonstrating that in-kind transfers are welfare improving to beneficiaries relative to cash if the covariance between the marginal utility of income and price is positive. Using calorie shortfalls as a marginal utility proxy, we find that in-kind transfers are preferred for low-income Indian households. Expansions in India's flagship in-kind food transfer program not only increase caloric intake but also reduce caloric sensitivity to prices. Our results contribute to ongoing debates about the optimal form of social protection programs.

Keywords: In-kind transfers; Cash transfers; Price risk; Public distribution system; India (search for similar items in EconPapers)
JEL-codes: H42 H53 I38 O12 Q18 (search for similar items in EconPapers)
Date: 2022-06
New Economics Papers: this item is included in nep-ias, nep-pbe and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Related works:
Journal Article: In-Kind Transfers as Insurance (2024)
Working Paper: In-Kind Transfers as Insurance (2021)
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