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

Nicholas Li

No 82, Working Papers from Toronto Metropolitan University, Department of Economics

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.

Keywords: in-kind; transfers; food; agriculture; specialization; trade; production; household; India (search for similar items in EconPapers)
JEL-codes: H53 O12 O13 (search for similar items in EconPapers)
Pages: 82 pages
Date: 2022-01
New Economics Papers: this item is included in nep-agr and nep-dev
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