Upcoming Seminar

IFPRI’s Applied Microeconomics & Development Seminar Series provides a forum for researchers to present top-quality applied microeconomics and development work. Seminars are held on the first and third Thursdays of each month at IFPRI’s Washington DC office. Please contact Julie Lang (j.lang@cgiar.org) if you have any questions.

October 18
Speaker: Sandip Sukhtankar, Associate Professor at University of Virginia
12:00-1:15 pm
Conference Room 9A

In-Kind Transfers as Insurance
In recent years, there has been increasing academic and policy interest in cash as the preferred form of transfer to low income households. However, in-kind transfers remain prevalent throughout the developing world. In this paper we consider one potential advantage of in-kind transfers: the ability to provide insurance against price shocks. Poorly integrated markets in many developing countries mean that households face substantial exposure to commodity price risk. We develop a model which shows that in-kind transfers can be welfare improving relative to cash in a world with price risk. In the context of India, we show that price shocks for food commodities are negatively associated with caloric intake. We then demonstrate that policies that expand the generosity of the Public Distribution System (PDS) – India’s in-kind food subsidy program – are associated with increased caloric intake by households as well as reduced sensitivity of calories to local prices, suggesting that the PDS provides insurance against food price risk.

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