The Benefits of In-Kind Government Programs

Robert M. Schwab, Journal of Public Economics 27(2), 195-210, July .


In this paper I present a methodology to calculate the benefits of in-kind programs such as public housing which restrict consumption of some goods to the levels offered by the government. Most previous studies begin with an a priori specification of the direct utility function. I begin with the ordinary demand function and then integrate demand to recover the indirect utility function and the expenditure function. I argue that this approach gives additional flexibility in choosing a functional form which best describes the data. I then use this methodology to estimate the benefits of the U.S. government's Section 8 housing program.

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