Monday, July 12, 2021

Blog: Market power and in-kind transfers: Evidence from Mexico

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In settings with market power, providing goods directly can generate larger consumer surplus gains than cash and vouchers because of price effects

Governments worldwide expend considerable resources providing or subsidising essential goods and services: from food and public housing to schools and healthcare. Many of these cases involve direct provision, often despite the existence of privately supplied alternatives. ’Ration stores’ – at which households can typically purchase staple foods or essential household consumption goods at subsidised prices – are examples of this... Read More