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

Nicholas Li

Working Papers from University of Toronto, 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. I leverage the expansion of India’s Public Distribution system between 1993-2009 as a natural experiment generating variation in the quantity and value of staple grains transferred to households and districts. I find that larger PDS quantities are associated with modest decreases in staple production and farming and modest increases in market/ comparative advantage oriented specialization. The effects are larger for households and districts with higher market transaction costs or less market-oriented agriculture.

Keywords: agriculture; production; India; food; Public Distribution System; in-kind transfers (search for similar items in EconPapers)
JEL-codes: O20 Q18 (search for similar items in EconPapers)
Pages: Unknown pages
Date: 2021-06-25
New Economics Papers: this item is included in nep-agr and nep-dev
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