When:
Thursday, November 14, 2024
12:15 PM - 1:15 PM CT
Where: Kellogg Global Hub, L120, 2211 Campus Drive, Evanston, IL 60208 map it
Audience: Faculty/Staff - Post Docs/Docs - Graduate Students
Contact:
Maggie Hendrix
(847) 467-7263
Group: Department of Economics: Development Economics Lunch Seminar
Category: Academic
Speaker: Johanna Rayl
Title: Redistribution with Limited Information: Fuel Subsidies and Cash Transfers in Indonesia
Abstract: I study optimal design of cash and in-kind redistribution in a setting with limited information: cash transfers and fuel subsidies in Indonesia. In 2005, the government shifted spending away from a costly and regressive consumer fossil fuel subsidy and towards a targeted cash transfer program. Cash transfers are a gold standard for redistribution, but their effectiveness is constrained by the information set available for targeting, potentially generating opportunities for second-best targeting using in-kind mechanisms. I ask how an optimal combination of cash and in-kind (subsidy) transfers could improve redistributional outcomes. Fuel subsidies may allow for additional targeting if the self-selection generated by consumption choices helps to overcome the information friction. I model fuel demand, fuel supply, and solve for the optimal policy given a limited government information set.