Welfare programs are often implemented in-kind to promote outcomes
that might not be realized under cash transfers. This paper
tests whether such paternalistically motivated transfers are justified
compared to cash, using a randomized controlled trial of Mexico's
food assistance program. In relation to total food consumption, the
in-kind transfer was infra-marginal and nondistorting. However, the
transfer contained ten food items, and there was large variation in
the extent to which individual foods were extra-marginal and distorting.
Small differences in the nutritional intake of women and children
under in-kind transfers did not lead to meaningful differential
improvements in health outcomes compared to cash.
Cunha, Jesse M.
"Testing Paternalism: Cash versus In-Kind Transfers."
American Economic Journal: Applied Economics,
Health and Inequality
Health: Government Policy; Regulation; Public Health
Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs
Economic Development: Human Resources; Human Development; Income Distribution; Migration