Using data from a two-year randomized pricing experiment in China, we study the impact and design of subsidy policies for weather insurance. Results show that subsidies are effective in boosting demand in the short-run but not in the longer term. Exploring the channels, we show that while subsidies increase the direct and social effects of payout experiences by enlarging coverage, they also dam...

A government would like to subsidize an indivisible good. Consumers’ valuations of the good vary according to their wealth and benefits from the good. A subsidy scheme may be based on consumers’ wealth or benefit information. We translate a wealth-based policy to a benefit-based policy, and vice versa, and give a necessary and sufficient condition for the pair of policies to implement the same ...

We consider price competition models for oligopolistic markets, in which a significant part of the product or service price is paid by a third party, as a subsidy. The consumer is, therefore, impacted by the net price, defined as the difference between the nominal price and the subsidy, while the firms earn the full nominal price, partially paid by the subsidizing third party and the remainder ...

In this paper we characterize quantitatively the optimal mix of progressive labor income and capital income taxes as well as and education subsidies in a model with endogenous human capital formation, borrowing constraints, income risk. and incomplete financial markets. Progressive labor income taxes provide social insurance against idiosyncratic income risk and redistributes after tax income a...

We evaluate the impact of firm-specific export subsidies on exports in Colombia. Using a two-stage Heckman selection procedure, we obtain firm-specific predicted subsidy amounts that can be explained by the characteristics that determine the firms’ eligibility for the government support and its amount. Drawing on the accounts of the discretionary allocation of subsidies in developing countries,...

This paper evaluates the effects of two subsidy schemes targeted at disadvantaged students in the Netherlands. The first scheme gives schools with at least 70 percent minority students extra funding for personnel. The second scheme gives schools with at least 70 percent students from different disadvantaged groups extra funding for computers and for language materials. The cutoffs at 70 percent...

We show how preferred committee assignments act as an electoral subsidy for members of Congress—empowering representatives’ legislative careers. When holding preferred assignments, legislators are free to focus on legislative activity in Washington, DC. But when the subsidy is removed, legislators are forced to direct attention to the district. To test our theory of legislative subsidy, we expl...

This paper examines how intellectual property rights (IPR) protection affects innovation and foreign direct investment (FDI) using a North–South quality-ladder model incorporating the exogenous and costless imitation of technology and subsidy policies for both R&D and FDI. We show that for the interior steady state to be stable, either R&D or FDI subsidy rates must be positive. Our findings als...