This study includes the marginal cost of redistribution (MCR) in analyzing the
adjusted tax price faced by the median voter. The adjusted tax price is then used to
analyze the degree to which efficiency costs change the level of income redistribution
provided through the Aid to Families with Dependent Children (AFDC) program.
The results of this article suggest that efficiency costs, on average, raise the cost of
AFDC transfers by approximately 28% and reduces the level of AFDC redistribution
by about 14.6%.
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