Deadweight Losses or Gains from In-kind Transfers: Experimental Evidence

Klaus Abbink, Gaurav Datt, Lata Gangadharan (), Digvijay Negi and Bharat Ramaswami
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Digvijay Negi: Indira Gandhi Institute of Development Research

No 110, Working Papers from Ashoka University, Department of Economics

Abstract: Are in-kind transfers associated with deadweight losses? To answer this question, we conducted an incentivized field experiment in India and offered low-income respondents 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 women from female-headed households and a deadweight gain among women from male-headed households. After investigating alternative mechanisms, our results highlight that greater bargaining power of women within households increases the propensity to choose cash over rice.

Keywords: cash; transfer; deadweight; loss; field; experiment; food; subsidy; in-kind; transfer (search for similar items in EconPapers)
Pages: 48
Date: 2024-03-31
New Economics Papers: this item is included in nep-agr, nep-dcm and nep-exp
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Persistent link: https://EconPapers.repec.org/RePEc:ash:wpaper:110

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