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Deadweight Losses or Gains from In-kind Transfers: Experimental Evidence

Author

Listed:
  • Klaus Abbink

    (Monash University)

  • Gaurav Datt

    (Monash University)

  • Lata Gangadharan

    (Monash University)

  • Digvijay Negi

    (Indira Gandhi Institute of Development Research)

  • Bharat Ramaswami

    (Ashoka University)

Abstract

Are in-kind transfers associated with deadweight losses? To answer this question, we conducted an incentivized field experiment in India and offered low-income respondents 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 women from female-headed households and a deadweight gain among women from male-headed households. After investigating alternative mechanisms, our results highlight that greater bargaining power of women within households increases the propensity to choose cash over rice.

Suggested Citation

  • Klaus Abbink & Gaurav Datt & Lata Gangadharan & Digvijay Negi & Bharat Ramaswami, 2024. "Deadweight Losses or Gains from In-kind Transfers: Experimental Evidence," Working Papers 110, Ashoka University, Department of Economics.
    • Handle: RePEc:ash:wpaper:110
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    File URL: https://dp.ashoka.edu.in/ash/wpaper/paper110_0.pdf
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    References listed on IDEAS

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