NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Do Consumer Price Subsidies Really Improve Nutrition?

Robert T. Jensen, Nolan H. Miller

NBER Working Paper No. 16102
Issued in June 2010
NBER Program(s):   AG   HC

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.

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Document Object Identifier (DOI): 10.3386/w16102

Published: Jensen, R., Miller, N. 2011. "Do Consumer Price Subsidies Really Improve Nutrition?". Review of Economics and Statistics

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