Price stabilization vs income support: Which benefits consumers more?
Direct cash transfers (DBT) are becoming more popular than price subsidies for helping the poor. A study compared the costs of DBT and price stabilization programs. The cost depends on consumer preferences and the type of goods. Different preferences can make one program cheaper than the other. Policymakers need to consider these differences before deciding on a program. The type of preferences used is crucial in choosing between DBT and price stabilization.