Why would cash transfers typically be preferred by recipients over in-kind transfers?

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pohnpei397 eNotes educator| Certified Educator

People who are going to receive help from the government might be more likely to prefer cash transfers over in-kind transfers because the cash transfers are more flexible and, perhaps, less humiliating to use.

In-kind transfers can be humiliating to use.  One type of such transfers, in the US, is the food stamp program.  When you use these, the checkers at the supermarket, along with those in line behind you, know that you are using them.  This makes it clear that you are poor, which can be humiliating.  When the government simply puts cash in a bank account, it is much less apparent to others that you are receiving government assistance.

In-kind transfers also tend to be less flexible.  If you get a certain amount of credit that can only be used on food, for example, it does not help you if what you really need is a part for your car.  You cannot skimp on food to save up to buy the car part.  When you are given a cash transfer, that money is yours to do with as you see fit.

Because cash transfers provide more flexibility and greater dignity, recipients might tend to prefer them over in-kind transfers.