Effectiveness of food subsidies in raising healthy food consumption: Public distribution of pulses in India

Abstract

This paper provides evidence on the effectiveness of one of the most common policies to improve nutrition among the poor, that is, a food subsidy. We study the case of subsidies on pulses in select Indian states and their impact on consumption and ultimately nutrition (protein intake). As a natural experiment, we use the introduction of pulses into India’s Public Distribution System (PDS) where the variations in prices were brought about by the inclusion of pulses in the PDS in some states and not in others. Our difference in difference (DID) estimates show that change in the consumption of pulses because of their inclusion in the PDS, though statistically significant, was of a small order. The impact was not large enough to bring about any sizable difference in consumption of pulses or the total protein intake. The results withstand several robustness checks including randomized inference and triple differencing based on location and other consumer characteristics.