Reforming Food Subsidy Schemes: Estimating the Gains from Self‐targeting in India

Bhaskar Dutta and Bharat Ramaswami

Review of Development Economics, 2004, vol. 8, issue 2, 309-324

Abstract: The paper uses the theoretical framework of the theory of tax reform to analyze whether a “small” change in an existing food subsidy program can be both welfare‐improving and revenue‐neutral. It shows how existing econometric methods can be adapted to estimate demand parameters even when household‐level data exhibit little price variation because the government controls food prices. The methodology is used to estimate welfare changes from shifting a rupee of subsidy on existing commodities to coarse cereals in the Indian public distribution system.

Date: 2004
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https://doi.org/10.1111/j.1467-9361.2004.00235.x

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Working Paper: Reforming food subsidy scheme: Estimating the gains from self-targetting in India (2002)
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