More Unintended Consequences

Mayor Bloomberg of New York, hardly known as a conservative or libertarian firebrand, has ignited a controversy by claiming that some people voluntarily enter homeless shelters simply to receive rent subsidy vouchers that are only available to shelter residents. The New York Times takes a look, and finds some evidence that this is true. This is an important unintended consequence not simply because people may be gaming the system, but also because, assuming that shelter resources are scarce, like anything else in our economic world, then these resources are being diverted away from people who may much more in need.