Estimating the Welfare Costs of Reforming the Iraq Public Distribution System : A Mixed Demand Approach
The Iraqi Public Distribution System is the largest universal, in-kind subsidy system in the world. In 2012, the Public Distribution System transfers accounted for as much as 30 percent of incomes of the poorest 10 percent of the Iraqi population a...
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World Bank, Washington, DC
2017
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| Online Access: | http://documents.worldbank.org/curated/en/171291497886159518/Estimating-the-welfare-costs-of-reforming-the-Iraq-public-distribution-system-a-mixed-demand-approach http://hdl.handle.net/10986/27305 |
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okr-10986-273052021-06-12T09:01:50Z Estimating the Welfare Costs of Reforming the Iraq Public Distribution System : A Mixed Demand Approach Krishnan, Nandini Ramadan, Racha Olivieri, Sergio PUBLIC DISTRIBUTION FOOD SUBSIDIES SAFETY NET The Iraqi Public Distribution System is the largest universal, in-kind subsidy system in the world. In 2012, the Public Distribution System transfers accounted for as much as 30 percent of incomes of the poorest 10 percent of the Iraqi population and provided 70 percent of the calories of the poorest 40 percent. In effect, the Public Distribution System remains the only safety net program that covers all the poor and vulnerable in the country. Yet, it is a very inefficient and expensive means to deliver transfers to the poor and creates distortions in the economy as well as an unsustainable fiscal burden. The fiscal crisis since mid-2014 has put reform of the Public Distribution System back on the agenda. This paper employs a mixed demand approach to analyze the consumption patterns of Iraqi households and quantify the welfare impact of a potential reform of the Public Distribution System in urban areas. The results show that household consumption of Public Distribution System items is relatively inelastic to changes in price. Consumption is more inelastic for the poorest quintiles and, for much of the population, these goods are not inferior, but rather normal goods. Cross-sectional comparisons suggest that with improvements in welfare levels, and with well-functioning markets, some segments of the population are substituting away from the Public Distribution System and increasing their consumption of market substitutes. The removal of all subsidies will require compensating poor households by 74.4 percent of their expenditures compared with nearly 40 percent for the richest households in urban areas. 2017-06-21T20:41:47Z 2017-06-21T20:41:47Z 2017-06 Working Paper http://documents.worldbank.org/curated/en/171291497886159518/Estimating-the-welfare-costs-of-reforming-the-Iraq-public-distribution-system-a-mixed-demand-approach http://hdl.handle.net/10986/27305 English en_US Policy Research Working Paper;No. 8106 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Middle East and North Africa Iraq |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
PUBLIC DISTRIBUTION FOOD SUBSIDIES SAFETY NET |
| spellingShingle |
PUBLIC DISTRIBUTION FOOD SUBSIDIES SAFETY NET Krishnan, Nandini Ramadan, Racha Olivieri, Sergio Estimating the Welfare Costs of Reforming the Iraq Public Distribution System : A Mixed Demand Approach |
| geographic_facet |
Middle East and North Africa Iraq |
| relation |
Policy Research Working Paper;No. 8106 |
| description |
The Iraqi Public Distribution System is
the largest universal, in-kind subsidy system in the world.
In 2012, the Public Distribution System transfers accounted
for as much as 30 percent of incomes of the poorest 10
percent of the Iraqi population and provided 70 percent of
the calories of the poorest 40 percent. In effect, the
Public Distribution System remains the only safety net
program that covers all the poor and vulnerable in the
country. Yet, it is a very inefficient and expensive means
to deliver transfers to the poor and creates distortions in
the economy as well as an unsustainable fiscal burden. The
fiscal crisis since mid-2014 has put reform of the Public
Distribution System back on the agenda. This paper employs a
mixed demand approach to analyze the consumption patterns of
Iraqi households and quantify the welfare impact of a
potential reform of the Public Distribution System in urban
areas. The results show that household consumption of Public
Distribution System items is relatively inelastic to changes
in price. Consumption is more inelastic for the poorest
quintiles and, for much of the population, these goods are
not inferior, but rather normal goods. Cross-sectional
comparisons suggest that with improvements in welfare
levels, and with well-functioning markets, some segments of
the population are substituting away from the Public
Distribution System and increasing their consumption of
market substitutes. The removal of all subsidies will
require compensating poor households by 74.4 percent of
their expenditures compared with nearly 40 percent for the
richest households in urban areas. |
| format |
Working Paper |
| author |
Krishnan, Nandini Ramadan, Racha Olivieri, Sergio |
| author_facet |
Krishnan, Nandini Ramadan, Racha Olivieri, Sergio |
| author_sort |
Krishnan, Nandini |
| title |
Estimating the Welfare Costs of Reforming the Iraq Public Distribution System : A Mixed Demand Approach |
| title_short |
Estimating the Welfare Costs of Reforming the Iraq Public Distribution System : A Mixed Demand Approach |
| title_full |
Estimating the Welfare Costs of Reforming the Iraq Public Distribution System : A Mixed Demand Approach |
| title_fullStr |
Estimating the Welfare Costs of Reforming the Iraq Public Distribution System : A Mixed Demand Approach |
| title_full_unstemmed |
Estimating the Welfare Costs of Reforming the Iraq Public Distribution System : A Mixed Demand Approach |
| title_sort |
estimating the welfare costs of reforming the iraq public distribution system : a mixed demand approach |
| publisher |
World Bank, Washington, DC |
| publishDate |
2017 |
| url |
http://documents.worldbank.org/curated/en/171291497886159518/Estimating-the-welfare-costs-of-reforming-the-Iraq-public-distribution-system-a-mixed-demand-approach http://hdl.handle.net/10986/27305 |
| _version_ |
1764464283950776320 |