American Economic Journal:
Applied Economics
ISSN 1945-7782 (Print) | ISSN 1945-7790 (Online)
Private Information and the Allocation of Land Use Subsidies in Malawi
American Economic Journal: Applied Economics
vol. 5,
no. 3, July 2013
(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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