Subsidized Food Distribution with Variable Service Quality: A Revealed Preference Approach

25 Pages Posted: 29 Apr 2012 Last revised: 21 Apr 2015

See all articles by Aashish Mehta

Aashish Mehta

University of California, Santa Barbara (UCSB)

Shikha Jha

Asian Development Bank

Pilipinas Quising

Asian Development Bank - Economic Research

Date Written: April 27, 2012

Abstract

This paper considers quality control in a program that distributes subsidized food. The standard theory of price controls and participatory approaches to food security both suggest that the quality of subsidized food and distribution services may be lower in vulnerable communities. We examine this suggestion in the context of a self-targeted rice subsidy program run by the Philippines National Food Authority (NFA) in 2006. We find that even though NFA rice is demanded more by poorer, less educated and more rice-dependent households, observationally equivalent households in poorer, less educated and more rice-dependent local markets had lower demand for NFA rice. This suggests that needier and less empowered locations received lower quality service. Moreover, we find that these more vulnerable, lower-demand locations were also badly served by several other public services, suggesting that they lack “voice”. These results highlight an important consideration in the debate on whether food security programs should distribute food or cash. The quality of cash distribution services should be easier to control.

Keywords: food subsidy, quality, Philippines, demand, revealed preference

JEL Classification: D12, H53, I38

Suggested Citation

Mehta, Aashish Sunil and Jha, Shikha and Quising, Pilipinas, Subsidized Food Distribution with Variable Service Quality: A Revealed Preference Approach (April 27, 2012). Available at SSRN: https://ssrn.com/abstract=2047220 or http://dx.doi.org/10.2139/ssrn.2047220

Aashish Sunil Mehta (Contact Author)

University of California, Santa Barbara (UCSB) ( email )

Santa Barbara, CA 93106
United States

HOME PAGE: http://www.global.ucsb.edu/people/aashish-mehta

Shikha Jha

Asian Development Bank ( email )

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines

Pilipinas Quising

Asian Development Bank - Economic Research ( email )

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines

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