Food Price Subsidies and Nutrition: Evidence from State Reforms to India's Public Distribution System

We investigate whether food price subsidies affect household nutrition using a dramatic expansion of the availability of subsidized rice in the Indian state of Chhattisgarh in the early 2000's. Households in Chhattisgarh increased their consumption of pulses, animal-based protein, and produce relative to households in districts bordering the state as the availability of subsidized rice expanded. This increase is driven by households eligible for rice subsidies, and we do not find evidence that ineligible households changed their diet. These results contrast with recent studies suggesting that food subsidies have little effect on nutrition.