Research on Government Logistics Subsidies for Poverty Alleviation with Non-uniform Distribution of Consumers

Abstract This study analyzes the influence of the government logistics subsidies for poverty alleviation on the competitiveness of agricultural products between impoverished and less impoverished general regions, and compares two types of subsidies. Our analysis is based on a Hotelling model with an asymmetric triangular distribution of consumer density. There are two types of government logistics subsidies for poverty alleviation: the agricultural product upstream logistics subsidy (PUS) and the cold chain logistics project subsidy (CPS). The former is a postage subsidy for package units given to farmers and the latter is a financial subsidy given to logistics enterprises. This paper compares the main decision-making and poverty alleviation effect of these two subsidies, and the type of subsidy that is selected by government under different circumstances. Results show that, when the government subsidies are strong enough, farmers' profits in the impoverished region may exceed those in the general region, or even lead to a loss of income for farmers in the general region. When consumers are less sensitive to the price of agricultural products, the PUS does not necessarily increase social welfare in the impoverished region. The government should implement the PUS when consumers are not sensitive to the logistics service, and implement the CPS when consumers are more sensitive to it. When consumers are more price sensitive, the PUS can always improve social welfare in the impoverished region, and its effect on poverty alleviation is greater than that of the CPS. The results and insights from this study could serve as a reference for policymakers, helping them devise and select appropriate logistics subsidies. The results of our study can also help farmers make better use of these subsidies.