Targeting In-Kind Transfers through Market Design: A Revealed Preference Analysis of Public Housing Allocation
- (pp. 2660-96)
AbstractPublic housing benefits are rationed through wait lists. Theoretical work on public housing allocation has debated how much choice applicants should have over units, identifying a possible trade-off between efficiency and redistribution. This paper empirically establishes the existence and economic importance of this trade-off using wait list data from Cambridge, Massachusetts. I estimate a model of public housing preferences in a setting where heterogeneous apartments are rationed through waiting time. Eliminating choice would improve targeting but reduce tenant welfare by more than 30 percent. Such a change is only justified on targeting grounds by a strong social preference for redistribution.
CitationWaldinger, Daniel. 2021. "Targeting In-Kind Transfers through Market Design: A Revealed Preference Analysis of Public Housing Allocation." American Economic Review, 111 (8): 2660-96. DOI: 10.1257/aer.20190516
- D47 Market Design
- H75 State and Local Government: Health; Education; Welfare; Public Pensions
- I38 Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs
- R38 Production Analysis and Firm Location: Government Policy