American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
In-Kind Transfers as Insurance
American Economic Review
vol. 114,
no. 9, September 2024
(pp. 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.Citation
Gadenne, Lucie, Samuel Norris, Monica Singhal, and Sandip Sukhtankar. 2024. "In-Kind Transfers as Insurance." American Economic Review, 114 (9): 2861–97. DOI: 10.1257/aer.20220822Additional Materials
JEL Classification
- D12 Consumer Economics: Empirical Analysis
- H53 National Government Expenditures and Welfare Programs
- I18 Health: Government Policy; Regulation; Public Health
- I38 Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs
- O12 Microeconomic Analyses of Economic Development
- O15 Economic Development: Human Resources; Human Development; Income Distribution; Migration