Food Price Subsidies and Nutrition: Evidence from State Reforms

We investigate whether food price subsidies affect household nutrition using a dramatic expansion of the availability of subsidized rice in the Indian state of Chhattisgarh in the early 2000’s. Households in Chhattisgarh improved their nutritional intake relative to households in districts bordering the state as the availability of subsidized rice expanded. This increase is driven by households most likely to be eligible for rice subsidies, and we do not find evidence that households least likely to be eligible changed their diet. These results differ from recent studies suggesting that food subsidies may have little effect on nutrition.