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Do Consumer Price Subsidies Really Improve Nutrition?

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  • Robert T. Jensen
  • Nolan H. Miller

Abstract

Many developing countries use food-price subsidies or price controls to improve the nutrition of the poor. 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 intended impact of the subsidy. 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.

Suggested Citation

  • Robert T. Jensen & Nolan H. Miller, 2010. "Do Consumer Price Subsidies Really Improve Nutrition?," NBER Working Papers 16102, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:16102
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    References listed on IDEAS

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    Cited by:

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    More about this item

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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