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

Klaus Abbink, Gaurav Datt, Lata Gangadharan (), Digvijay Negi () and Bharat Ramaswami

No 2022-10, Monash Economics Working Papers from Monash University, Department of Economics

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.

Keywords: deadweight loss; in-kind transfer; cash transfer; food subsidy; field experiment (search for similar items in EconPapers)
JEL-codes: C93 D13 I38 J16 Q18 (search for similar items in EconPapers)
Date: 2022-05
New Economics Papers: this item is included in nep-agr, nep-dcm, nep-dev and nep-exp
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