Why Is So Much Redistribution In-Kind and Not in Cash? Evidence from a Survey Experiment

National Tax Journal (forthcoming)

79 Pages Posted: 30 Sep 2020 Last revised: 8 Feb 2022

Date Written: January 2022

Abstract

Economists often point to the superiority of cash transfers over in-kind assistance as a means of redistribution because recipients can choose how to use these resources. However, among the trillions of dollars of annual U.S. transfers, redistribution is mostly in-kind. We conducted a survey experiment—using a choice between a cash transfer and a transfer that could be spent only on a bundle of “necessities”—to help explain why. We show that the general population overwhelmingly prefers in-kind redistribution, largely for paternalistic reasons. This preference was common to a majority of virtually all segments of the general population, though not to a sample of educational elites. A persuasion treatment on the value of choice, while impactful, did not change this overall preference for in-kind. For an equal-sized program, below-poverty respondents preferred receiving cash. But they appeared to prefer the larger in-kind transfer to the smaller cash transfer that the general population was willing to support. This suggests that an in-kind transfer may be preferable to both recipients and the general population.

Keywords: redistribution, survey experiment, social economics, in-kind, cash, universal basic income, paternalism, self-control mechanisms, behavioral economics, inequality

JEL Classification: D91, D64, H53, I38

Suggested Citation

Liscow, Zachary D. and Pershing, Abigail D., Why Is So Much Redistribution In-Kind and Not in Cash? Evidence from a Survey Experiment (January 2022). National Tax Journal (forthcoming), Available at SSRN: https://ssrn.com/abstract=3672415 or http://dx.doi.org/10.2139/ssrn.3672415

Zachary D. Liscow (Contact Author)

Yale University - Law School ( email )

127 Wall St.
New Haven, CT 06511
United States

Abigail D. Pershing

Yale Law School ( email )

127 Wall Street
New Haven, CT 06510
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
613
Abstract Views
4,143
rank
61,432
PlumX Metrics