Affiliation:
1. Department of Economics, Tufts University, 314 Braker Hall, Medford, MA 02155 and National Bureau of Economic Research.
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. (JEL D04, D44, D82, O13, Q24, Q28)
Publisher
American Economic Association
Subject
General Economics, Econometrics and Finance
Cited by
62 articles.
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