In-Kind Transfers as Insurance

Lucie Gadenne, Samuel Norris, Monica Singhal and Sandip Sukhtankar

American Economic Review, 2024, vol. 114, issue 9, 2861-97

Abstract: Households in developing countries often face variation in the prices of consumption goods. We develop a model demonstrating that in-kind transfers will provide insurance benefits against price risk if the covariance between the marginal utility of income and price is positive. Using calorie shortfalls as a proxy for marginal utility, we find that this condition holds 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.

JEL-codes: D12 H53 I18 I38 O12 O15 (search for similar items in EconPapers)
Date: 2024
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Related works:
Working Paper: In-Kind Transfers as Insurance (2022)
Working Paper: In-Kind Transfers as Insurance (2021)
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DOI: 10.1257/aer.20220822

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