Quality discrimination for redistributive purposes

Abstract

Public provision of private goods is very often considered as synonymous with redistribu tion in kind and thus associated with labels like food stamps, housing, education, health care, child care and elderly care. In spite of the scant attention devoted for many years to this issue by economic theory, it is today one of the most hotly debated issues. There are many reasons why economists now pay more attention to this subject. There is the political-economic motive. Loosely speaking, this is related to the reform in the Welfare State that most of the western industrialised countries are currently de signing. In particular, publicly provided private goods are often involved in social policies which are so costly that their survival is challenged by the necessity of cutting public budgets.