Question

What are consumer subsidies?

Answer 1

A consumption subsidy is one that subsidises the behavior of consumers. These type of subsidies are most common in developing countries where Governments subsidies such things as food, water, electricity and education on the basis that no matter how impoverished, all should be allowed those most basic requirements.[1] For example, some Governments offer ‘lifetime’ rates for electricity, that is, the first increment of electricity each month is subsidised