UC Davis Agricultural and Resource Economics

Kelsey Jack, Tufts University

Uncertainty, self selection and the design of subsidies: Evidence from Zambia

Date and Location

Wednesday, October 9, 2013, 4:10 PM - 5:40 PM
ARE Conference Room, 2102 Social Sciences and Humanities

Abstract

In the absence of uncertainty, Pigouvian subsidies to increase the private provision of public goods can achieve the same level of cost effectiveness if they are conditioned on the acquisition of inputs (take-up) or on outcomes. If, on the other hand, potential adopters face uncertainty in the costs or benefits of implementation then the direct link between take-up and outcomes is broken, and these two instruments pose different tradeoffs between participation and targeting. Cost-effectiveness may favor one or the other instrument depending on the cost of monitoring outcomes. We examine these tradeoffs in the context of a field experiment that exogeneously varies the level and the conditioning of a subsidy associated with adoption of agroforestry trees. The variation in subsidies identifies a structural model of intertemporal decision making under uncertainty that we use to inform welfare estimates.

Contact Us

2116 Social Sciences and Humanities
University of California, Davis
One Shields Avenue
Davis, CA 95616

Main Office: 530-752-1515
Student Advising Services: 530-754-9536
DeLoach Conference Room: 530-752-2916
Main Conference Room: 530-754-1850