Scandinavian Working Papers in Economics

CLTS Working Papers,
Norwegian University of Life Sciences, Centre for Land Tenure Studies

No 7/14: Economy-wide effects of input subsidies in Malawi: Market imperfections and household heterogeneity

Sofie Waage Skjeflo and Stein Holden ()
Additional contact information
Sofie Waage Skjeflo: Centre for Land Tenure Studies, Norwegian University of Life Sciences, Postal: Centre for Land Tenure Studies, Norwegian University of Life Sciences, P.O. Box 5003, NO-1432 Aas, Norway
Stein Holden: Centre for Land Tenure Studies, Norwegian University of Life Sciences, Postal: Centre for Land Tenure Studies, Norwegian University of Life Sciences, P.O. Box 5003, NO-1432 Aas, Norway

Abstract: The potential bene ts of providing subsidized inputs to farm-households in developing coun- tries may reach well beyond the targeted households. More speci cally, increased food production and demand for rural labor may bene t poor households through lower food prices and higher rural wages. However, two recent studies of a large input subsidy program in Malawi nd that these e ects are smaller than expected based on anecdotal evidence and previous studies using simulation models. In this paper we provide a potential explanation for this nding by using six farm-household programming models to show how market imperfections limit households' ability to take advantage of cheaper inputs. Our ndings suggest that input subsidy programs could be combined with improved market infrastructure and market access in order to increase non-bene ciary households' bene ts from input subsidies.

Keywords: Input subsidies; Malawi; Farm-household models

JEL-codes: Q12; Q18

35 pages, November 19, 2014

Full text files

clts_wp_07_14.pdf PDF-file 

Download statistics

Questions (including download problems) about the papers in this series should be directed to Kateryna Krutskykh ()
Report other problems with accessing this service to Sune Karlsson ().

This page generated on 2018-01-23 23:36:19.