The Review of Economics and Statistics Vol. 93 No. 4 2011
Do Consumer Price Subsidies Really Improve Nutrition?
Abstract
Many developing countries use food-price subsidies or controls to improve nutrition. However, subsidizing goods on which households spend a high proportion of their budget can create large wealth effects. Consumers may then substitute towards foods with higher non-nutritional attributes (e.g., taste), but lower nutritional content per unit of currency, weakening or perhaps even reversing the subsidy's intended impact. We analyze data from a randomized program of large price subsidies for poor households in two provinces of China and find no evidence that the subsidies improved nutrition. In fact, it may have had a negative impact for some households.
- DOI
- 10.1162/rest_a_00118
- Volume
- 93
- Issue
- 4
- Pages
- 1205-1223
- Language
- en
- Sources
- openalex crossref