1. In contrast, the effect of expenditure appears to be progressive, with cash transfers being sizeable at the lower end. 2. Suppose direct taxes and cash transfers are allocated and then cash transfers are increased. 3. One of the standard questions of public finance theory is why redistribution is made to recipients via price subsidies and in-kind transfers rather than through cash transfers. 4. Here there is an excess burden associated with price subsidies or in-kind transfers which would be absent in the case of a cash transfer. 5. With a cash transfer the recipient of government assistance would attain a welfare level as shown by. 6. The cash transfer does not distort prices and appears a more efficient redistributive instrument. 7. Again, the cash transfer leaves the individual less constrained, and the welfare maximum with the cash transfer greater than that achieved with the in-kind transfer. 8. When the policy and administrative costs of checking this are considered, the advantages of in-kind transfer over cash transfer are reduced. 9. Authorities are allowing the Oklahoma City bank to take deliveries of checks for processing but have refused to allow armored trucks to enter the area for cash transfers. |