Deadweight losses or gains from in-kind transfers? Experimental evidence from India. WP No. 1/22

Deadweight losses or gains from in-kind transfers? Experimental evidence from India

Abstract

Are in-kind transfers associated with deadweight losses? To answer this, we conducted an incentivized field experiment in India, which offered low-income households the choice between a free quantity of rice and varying amounts of cash to elicit their willingness to pay for rice. Contrary to expectation, we find evidence of deadweight gain on average, though with a striking contrast between a deadweight loss among respondents from female-headed households and a deadweight gain among respondents from male-headed households. Our results highlight the role of gender differences in bargaining power in shaping the choice between cash or rice.

Authors

  • Klaus Abbinka
  • Gaurav Datt
  • Lata Gangadharan
  • Digvijay Negi
  • Bharat Ramaswami

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