TY - JOUR
T1 - Transfers in cash and in-kind
T2 - Theory meets the data
AU - Currie, Janet
AU - Gahvari, Firouz
PY - 2008/6
Y1 - 2008/6
N2 - We review theoretical explanations for in-kind transfers in light of the limited empirical evidence. After reviewing the traditional paternalistic arguments, we consider explanations based on imperfect information and self-targeting. We then discuss the large literature on in-kind programs as a way of improving the efficiency of the tax system and a range of other possible explanations, including the "Samaritan's Dilemma," pecuniary effects, credit constraints, asymmetric information amongst agents, and political economy considerations. Our reading of the evidence suggests that paternalism and interdependent preferences are leading overall explanations for the existence of in-kind transfer programs but that some of the other arguments may apply to specific cases. Political economy considerations must also be part of the story.
AB - We review theoretical explanations for in-kind transfers in light of the limited empirical evidence. After reviewing the traditional paternalistic arguments, we consider explanations based on imperfect information and self-targeting. We then discuss the large literature on in-kind programs as a way of improving the efficiency of the tax system and a range of other possible explanations, including the "Samaritan's Dilemma," pecuniary effects, credit constraints, asymmetric information amongst agents, and political economy considerations. Our reading of the evidence suggests that paternalism and interdependent preferences are leading overall explanations for the existence of in-kind transfer programs but that some of the other arguments may apply to specific cases. Political economy considerations must also be part of the story.
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U2 - 10.1257/jel.46.2.333
DO - 10.1257/jel.46.2.333
M3 - Article
AN - SCOPUS:47249111798
SN - 0022-0515
VL - 46
SP - 333
EP - 383
JO - Journal of Economic Literature
JF - Journal of Economic Literature
IS - 2
ER -