Data and Code for "Curbing Leakage in Public Programs: Evidence from India's Direct Benefit Transfer Policy"

Principal Investigator(s): View help for Principal Investigator(s) Prabhat Barnwal, Michigan State University

Name	File Type	Size	Last Modified
Replication_AER-2016-1864			10/15/2024 05:57:PM

Project Citation:

Barnwal, Prabhat. Data and Code for “Curbing Leakage in Public Programs: Evidence from India’s Direct Benefit Transfer Policy.” Nashville, TN: American Economic Association [publisher], 2024. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2024-10-23. https://doi.org/10.3886/E195367V1

Project Description

Summary:

Targeted price subsidies create a gap between subsidized and unsubsidized prices. The resulting dual pricing can lead to arbitrage opportunities where intermediaries divert the subsidized goods to unintended beneficiaries via the black market. I study India's Direct Benefit Transfer policy for cooking fuel subsidies, which altered the existing subsidy program by transferring subsidies directly to beneficiaries' bank accounts.

The policy decreased subsidized fuel purchases, indicating a reduction in diversion to the black market. Changes in unsubsidized fuel sales and black-market prices provide supporting evidence that leakage was reduced. These results suggest that addressing the underlying perverse incentives in welfare delivery can improve efficiency by curbing leakages. This replication package includes the data and code accompanying the article.

Scope of Project

Subject Terms: Dual pricing; Subsidy diversion; In-kind transfer

JEL Classification:
      H26 Tax Evasion and Avoidance
      I38 Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs
      O17 Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

Geographic Coverage: India

Time Period(s): 2013 – 2015

Data Type(s): administrative records data; event/transaction data; survey data

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Published Versions

V1 [2024-10-23]

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Dublin Core

DDI 2.5

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