American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Targeting In-Kind Transfers through Market Design: A Revealed Preference Analysis of Public Housing Allocation
American Economic Review
vol. 111,
no. 8, August 2021
(pp. 2660–96)
Abstract
Public 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.Citation
Waldinger, 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.20190516Additional Materials
JEL Classification
- 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