Private Information and the Allocation of Land Use Subsidies in Malawi
- (pp. 113-35)
Abstract
Efficient targeting of public programs is difficult when the cost or benefit to potential recipients is private information. This study illustrates the potential of self-selection to improve allocational outcomes in the context of a program that subsidizes tree planting in Malawi. Landholders who received a tree planting contract as a result of bidding in an auction kept significantly more trees alive over a three year period than did landholders who received the contract through a lottery. The gains from targeting on private information through the auction represent a 30 percent cost savings per surviving tree for the implementing organization.Citation
Jack, B Kelsey. 2013. "Private Information and the Allocation of Land Use Subsidies in Malawi." American Economic Journal: Applied Economics, 5 (3): 113-35. DOI: 10.1257/app.5.3.113Additional Materials
JEL Classification
- D04 Microeconomic Policy: Formulation; Implementation; Evaluation
- D44 Auctions
- D82 Asymmetric and Private Information; Mechanism Design
- O13 Economic Development: Agriculture; Natural Resources; Energy; Environment; Other Primary Products
- Q24 Renewable Resources and Conservation: Land
- Q28 Renewable Resources and Conservation: Government Policy
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