Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/267956 
Year of Publication: 
2022
Series/Report no.: 
IFS Working Paper No. W22/25
Publisher: 
Institute for Fiscal Studies (IFS), London
Abstract: 
In-kind transfers can provide insurance benefits when prices of consumption goods vary, as is common in developing countries. We develop a model demonstrating that in-kind transfers are welfare improving to beneficiaries relative to cash if the covariance between the marginal utility of income and price is positive. Using calorie shortfalls as a marginal utility proxy, we find that in-kind transfers are preferred 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.
Subjects: 
in-kind transfers
cash transfers
price risk
Public Distribution System
India
JEL: 
H42
H53
I38
O12
Q18
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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