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Paying Vs. Waiting in the Pursuit of Specific Egalitarianism

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Author Info
Jeremy Clark () (University of Canterbury)
Bonggeun Kim

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Abstract

We propose an allocation mechanism for publicly providing a private good such that the final allocation is simultaneously independent of income and increasing in strength of preference or need. The "pay or wait" mechanism consists of offering the good for sale at two outlets. The 'queuing' outlet would charge a low money price per unit, but high waiting timer per unit. The 'pricing' outlet would charge a relatively high money price with rapid service. High wage individuals will opt for the pricing outlet, and low wage individuals the queuing outlet. If the policy maker stocks the outlets in proportion to the distribution of high and low wage earners in the population, consumers of both wages will purchase the same amount on average, while those who value the good more relative to other goods will receive more of it. These outcomes are at risk if the good can be privately resold, but may be preserved if the policy maker can create transactions costs associated with resale.

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File URL: http://www.econ.canterbury.ac.nz/RePEc/cbt/econwp/0608.pdf
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Publisher Info
Paper provided by University of Canterbury, Department of Economics in its series Working Papers in Economics with number 06/08.

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Length: 43 pages
Date of creation: 10 Mar 2006
Date of revision:
Handle: RePEc:cbt:econwp:06/08

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Related research
Keywords: In-kind provision; redistribution; specific egalitarianism;

Other versions of this item:

Find related papers by JEL classification:
D30 - Microeconomics - - Distribution - - - General
D45 - Microeconomics - - Market Structure and Pricing - - - Rationing; Licensing
H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

This paper has been announced in the following NEP Reports:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Jeremy Clark & Bonggeun Kim, 2006. "Differential Time and Money Pricing as a Mechanism for In-kind Redistribution," Working Papers in Economics 06/07, University of Canterbury, Department of Economics. [Downloadable!]
  2. Barzel, Yoram, 1974. "A Theory of Rationing by Waiting," Journal of Law & Economics, University of Chicago Press, vol. 17(1), pages 73-95, April.
  3. Neil Bruce & Michael Waldman, 1988. "Transfers in Kind: Why They Can Be Efficient and Non-Paternalistic," UCLA Economics Working Papers 532, UCLA Department of Economics. [Downloadable!]
    Other versions:
  4. Weitzman, Martin L, 1991. "Price Distortion and Shortage Deformation, or What Happened to the Soap?," American Economic Review, American Economic Association, vol. 81(3), pages 401-14, June.
  5. Nichols, D & Smolensky, E & Tideman, T N, 1971. "Discrimination by Waiting Time in Merit Goods," American Economic Review, American Economic Association, vol. 61(3), pages 312-23, June. [Downloadable!] (restricted)
  6. Martin L. Weitzman, 1977. "Is the Price System or Rationing More Effective in Getting a Commodity to Those Who Need It Most?," Bell Journal of Economics, The RAND Corporation, vol. 8(2), pages 517-524, Autumn. [Downloadable!] (restricted)
    Other versions:
  7. Blackorby, Charles & Donaldson, David, 1988. "Cash versus Kind, Self-selection, and Efficient Transfers," American Economic Review, American Economic Association, vol. 78(4), pages 691-700, September. [Downloadable!] (restricted)
  8. Sam Bucovetsky, 1984. "On the Use of Distributional Waits," Canadian Journal of Economics, Canadian Economics Association, vol. 17(4), pages 699-717, November. [Downloadable!] (restricted)
  9. Sah, Raaj Kumar, 1987. "Queues, Rations, and Market: Comparisons of Outcomes for the Poor and the Rich," American Economic Review, American Economic Association, vol. 77(1), pages 69-77, March. [Downloadable!] (restricted)
  10. Blomquist, Suren & Christiansen, Vidar, 1995. " Public Provision of Private Goods as a Redistributive Device in an Optimum Income Tax Model," Scandinavian Journal of Economics, Blackwell Publishing, vol. 97(4), pages 547-67, December.
  11. Suen, Wing, 1989. "Rationing and Rent Dissipation in the Presence of Heterogeneous Individuals," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1384-94, December. [Downloadable!] (restricted)
  12. Alexeev, Michael & Leitzel, James, 2001. "Income distribution and price controls: Targeting a social safety net during economic transition," European Economic Review, Elsevier, vol. 45(9), pages 1647-1663, October. [Downloadable!] (restricted)
  13. Boadway, Robin & Marchand, Maurice, 1995. "The Use of Public Expenditures for Redistributive Purposes," Oxford Economic Papers, Oxford University Press, vol. 47(1), pages 45-59, January. [Downloadable!] (restricted)
    Other versions:
  14. Holt, Charles A, Jr & Sherman, Roger, 1982. "Waiting-Line Auctions," Journal of Political Economy, University of Chicago Press, vol. 90(2), pages 280-94, April. [Downloadable!] (restricted)
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