Entitlement fetching or snatching? Effects of arbitrage on India’s public distribution system
Would households be able to buy more subsidized grains from a food-based safety-net program if the difference between prices in the program and in the open market were to increase? This is an important question for safety-net programs anywhere in the world, but particularly so for the public distrib...
| Main Authors: | , , |
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| Format: | Artículo preliminar |
| Language: | Inglés |
| Published: |
International Food Policy Research Institute
2016
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| Subjects: | |
| Online Access: | https://hdl.handle.net/10568/147558 |
| _version_ | 1855514041495060480 |
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| author | Chakrabarti, Suman Kishore, Avinash Roy, Devesh |
| author_browse | Chakrabarti, Suman Kishore, Avinash Roy, Devesh |
| author_facet | Chakrabarti, Suman Kishore, Avinash Roy, Devesh |
| author_sort | Chakrabarti, Suman |
| collection | Repository of Agricultural Research Outputs (CGSpace) |
| description | Would households be able to buy more subsidized grains from a food-based safety-net program if the difference between prices in the program and in the open market were to increase? This is an important question for safety-net programs anywhere in the world, but particularly so for the public distribution system (PDS) of grains in India—the largest food-based safety-net program in the world. The standard economic intuition suggests that price controls distort signals and create incentives for unintended transactions. Price difference between the PDS and the open market compromise entitlements and divert grains to open markets—an entitlement-snatching effect. Drèze and Sen (2013), however, posit the opposite—an entitlement-fetching effect, where an increase in arbitrage increases the value of PDS entitlement. This raises the stakes in the PDS for eligible beneficiaries, resulting in a rise in accountability and ultimately an increase in household purchases of grains from the PDS. We test these two competing hypotheses using multiple datasets: consumer expenditure surveys conducted by the National Sample Survey Organization, and panel datasets from the India Human Development Survey and the Village Dynamics in South Asia. Depending on the context, we find both entitlement-snatching and entitlement-fetching effects. In states where welfare programs are better governed, the Drèze and Sen (2013) conjecture holds. Conversely, in states like Bihar and Jharkhand—where welfare programs are poorly run—the opposite pattern holds; that is, households’ purchase of subsidized grains recedes with greater arbitrage. |
| format | Artículo preliminar |
| id | CGSpace147558 |
| institution | CGIAR Consortium |
| language | Inglés |
| publishDate | 2016 |
| publishDateRange | 2016 |
| publishDateSort | 2016 |
| publisher | International Food Policy Research Institute |
| publisherStr | International Food Policy Research Institute |
| record_format | dspace |
| spelling | CGSpace1475582025-11-06T05:06:30Z Entitlement fetching or snatching? Effects of arbitrage on India’s public distribution system Chakrabarti, Suman Kishore, Avinash Roy, Devesh poverty alleviation households welfare social protection subsidies social safety nets Would households be able to buy more subsidized grains from a food-based safety-net program if the difference between prices in the program and in the open market were to increase? This is an important question for safety-net programs anywhere in the world, but particularly so for the public distribution system (PDS) of grains in India—the largest food-based safety-net program in the world. The standard economic intuition suggests that price controls distort signals and create incentives for unintended transactions. Price difference between the PDS and the open market compromise entitlements and divert grains to open markets—an entitlement-snatching effect. Drèze and Sen (2013), however, posit the opposite—an entitlement-fetching effect, where an increase in arbitrage increases the value of PDS entitlement. This raises the stakes in the PDS for eligible beneficiaries, resulting in a rise in accountability and ultimately an increase in household purchases of grains from the PDS. We test these two competing hypotheses using multiple datasets: consumer expenditure surveys conducted by the National Sample Survey Organization, and panel datasets from the India Human Development Survey and the Village Dynamics in South Asia. Depending on the context, we find both entitlement-snatching and entitlement-fetching effects. In states where welfare programs are better governed, the Drèze and Sen (2013) conjecture holds. Conversely, in states like Bihar and Jharkhand—where welfare programs are poorly run—the opposite pattern holds; that is, households’ purchase of subsidized grains recedes with greater arbitrage. 2016-12-22 2024-06-21T09:23:02Z 2024-06-21T09:23:02Z Working Paper https://hdl.handle.net/10568/147558 en https://hdl.handle.net/10568/147528 https://hdl.handle.net/10568/149707 Open Access application/pdf International Food Policy Research Institute Chakrabarti, Suman; Kishore, Avinash; and Roy, Devesh. 2016. Entitlement fetching or snatching? Effects of arbitrage on India’s public distribution system. IFPRI Discussion Paper 1588. Washington, DC: International Food Policy Research Institute (IFPRI). https://hdl.handle.net/10568/147558 |
| spellingShingle | poverty alleviation households welfare social protection subsidies social safety nets Chakrabarti, Suman Kishore, Avinash Roy, Devesh Entitlement fetching or snatching? Effects of arbitrage on India’s public distribution system |
| title | Entitlement fetching or snatching? Effects of arbitrage on India’s public distribution system |
| title_full | Entitlement fetching or snatching? Effects of arbitrage on India’s public distribution system |
| title_fullStr | Entitlement fetching or snatching? Effects of arbitrage on India’s public distribution system |
| title_full_unstemmed | Entitlement fetching or snatching? Effects of arbitrage on India’s public distribution system |
| title_short | Entitlement fetching or snatching? Effects of arbitrage on India’s public distribution system |
| title_sort | entitlement fetching or snatching effects of arbitrage on india s public distribution system |
| topic | poverty alleviation households welfare social protection subsidies social safety nets |
| url | https://hdl.handle.net/10568/147558 |
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