Welfare Programs and Donor-Recipient Adjustments

Abstract

Recent discussions of in-kind contributions versus money transfers in welfare programs provide the point of departure for this article. Using a two-person model where utility interdependencies exist, a donor-recipient interaction process is described. The conditions under which donor-desired consumption might be elicited from the recipient are also presented. Through the use of the model, potential donor-recipient adjustments are identified which might frustrate the intent of in-kind welfare programs.