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Private Information and the Allocation of Land Use Subsidies in Malawi

B. Kelsey Jack

American Economic Journal: Applied Economics, 2013, vol. 5, issue 3, 113-35

Abstract: Efficient targeting of public programs is difficult when the cost or benefit to potential recipients is private information. This study illustrates the potential of self-selection to improve allocational outcomes in the context of a program that subsidizes tree planting in Malawi. Landholders who received a tree planting contract as a result of bidding in an auction kept significantly more trees alive over a three year period than did landholders who received the contract through a lottery. The gains from targeting on private information through the auction represent a 30 percent cost savings per surviving tree for the implementing organization.

JEL-codes: D04 D44 D82 O13 Q24 Q28 (search for similar items in EconPapers)
Date: 2013
Note: DOI: 10.1257/app.5.3.113
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American Economic Journal: Applied Economics is currently edited by Alexandre Mas

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Handle: RePEc:aea:aejapp:v:5:y:2013:i:3:p:113-35