Question

Why do most economists prefer housing vouchers to publicly provided housing as a means of subsidizing low-income housing? Be sure to include any relevant graphs.

Answer 1

Economists prefer housing vouchers to publicly provided housing as a means of subsidizing low income housing because this helps the consumers to purchase the house of their choice rather than rely on the house given to them publicly. Thus, they can select the house of their choice using housing vouchers which helps them in moving to a higher indifference curve as compared to the case when they are publicly provided with housing. Thus, they become better off and are yielding more satisfaction in case of housing vouchers.