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How to Ration the Public Provision of Private Goods

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Abstract

This paper considers alternative allocation mechanisms in the public provision of private goods for the purpose of redistribution. The benchmark policy is to ration by low quality. Better off households choose higher quality private over subsidised public provision. It is suboptimal to ration by queues where individuals suffer deadweight losses while waiting. In contrast, waiting lists where households consume on the private market while waiting are optimal. Under certain circumstances, there are qualifying restrictions to remaining on the waiting list.

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  • Jeff Frank, 1997. "How to Ration the Public Provision of Private Goods," Royal Holloway, University of London: Discussion Papers in Economics 98/1, Department of Economics, Royal Holloway University of London, revised Jul 1997.
    • Handle: RePEc:hol:holodi:9801
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