If an in-kind transfer of a good does not force the recipient to consume more of the good than he would on his own, then cash and in-kind transfers have exactly the same effect on the consumption and welfare of the recipient.

Question

Quizplus · Accepted Answer

If the recipient is not forced to consume more of the good than he would on his own, then the value of the in-kind transfer and the cash transfer would be equal. This means that the recipient can use either the good or the cash to purchase other goods and services that they may prefer, resulting in the same level of consumption and welfare regardless of the type of transfer.

If an In-Kind Transfer of a Good Does Not Force