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The welfare effect of a consumer subsidy with price ceilings: the case of Chinese cell phones
dc.contributor.authorFan, Ying
dc.contributor.authorZhang, Ge
dc.date.accessioned2022-07-05T21:01:09Z
dc.date.available2023-07-05 17:01:08en
dc.date.available2022-07-05T21:01:09Z
dc.date.issued2022-06
dc.identifier.citationFan, Ying; Zhang, Ge (2022). "The welfare effect of a consumer subsidy with price ceilings: the case of Chinese cell phones." The RAND Journal of Economics 53(2): 429-449.
dc.identifier.issn0741-6261
dc.identifier.issn1756-2171
dc.identifier.urihttps://hdl.handle.net/2027.42/172970
dc.description.abstractSubsidies to consumers may cause firms to charge higher prices, which offsets consumer benefits from subsidies. We study a subsidy program design that mitigates such price increases by making products’ eligibility for a subsidy dependent on firms’ commitment to price ceilings. To quantify the importance of such competition for eligibility, we develop a structural model and an estimation procedure that accommodate binding pricing constraints. We find that competition for eligibility mitigates the price increases arising from the subsidy and even leads to a reduction in prices for some products. It improves consumer and total surpluses while limiting government subsidy payments.
dc.publisherWiley Periodicals, Inc.
dc.publisherOxford University Press
dc.subject.othersubsidy
dc.subject.othercompetition for eligibility
dc.subject.othercell phone
dc.subject.otherprice ceiling
dc.titleThe welfare effect of a consumer subsidy with price ceilings: the case of Chinese cell phones
dc.typeArticle
dc.rights.robotsIndexNoFollow
dc.subject.hlbsecondlevelEconomics
dc.subject.hlbtoplevelSocial Sciences
dc.description.peerreviewedPeer Reviewed
dc.description.bitstreamurlhttp://deepblue.lib.umich.edu/bitstream/2027.42/172970/1/rand12413.pdf
dc.description.bitstreamurlhttp://deepblue.lib.umich.edu/bitstream/2027.42/172970/2/rand12413_am.pdf
dc.identifier.doi10.1111/1756-2171.12413
dc.identifier.sourceThe RAND Journal of Economics
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dc.working.doiNOen
dc.owningcollnameInterdisciplinary and Peer-Reviewed


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