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

National Tax Journal (2022)

72 Pages Posted: 30 Sep 2020 Last revised: 30 Oct 2023

Date Written: January 1, 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 to help explain why. We show that the general population overwhelmingly prefers in-kind redistribution (in the survey, a transfer that can be spent only on a bundle of “necessities”) to cash, 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. Below-poverty respondents preferred receiving cash. But, the general population was willing to support a larger in-kind than cash transfer, and below-poverty respondents appeared to prefer this larger in-kind transfer, suggesting 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 1, 2022). National Tax Journal (2022), 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 negative results from your research you’d like to share?

Paper statistics

Downloads
893
Abstract Views
5,697
Rank
48,332
PlumX Metrics