Abstract
The article points out that a subsidy-in-kind, such as below-cost education provided by state universities, replaces more private consumption of the subsidized good that an equivalent money subsidy, such as a scholarship. Indeed, a subsidy-in-kind may reduce total consumption. Empirical estimates in the article indicate that in higher education (a) about three-fourths of government expenditures substitute for private expenditures, (b) this fraction has exceeded one in a recent period, (c) a substantial part of this government-private substitution is due to the in-kind form of government subsidies, and (d) there is less government-private substitution in enrollment than expenditures.
Keywords
SubsidyGovernment (linguistics)Consumption (sociology)EconomicsPublic economicsPrivate educationScholarshipHigher educationEconomic growthMarket economy
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Publication Info
- Year
- 1973
- Type
- article
- Volume
- 81
- Issue
- 1
- Pages
- 1-27
- Citations
- 201
- Access
- Closed
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Cite This
Sam Peltzman
(1973).
The Effect of Government Subsidies-in-Kind on Private Expenditures: The Case of Higher Education.
Journal of Political Economy
, 81
(1)
, 1-27.
https://doi.org/10.1086/260004
Identifiers
- DOI
- 10.1086/260004