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Queues, Rations, and Market: Comparisons of Outcomes for the Poor and the Rich

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  • Sah, Raaj Kumar

Abstract

This paper presents a positive comparison of the outcomes of several alternative allocation systems (the queue system, convertible and nonconvertible rations, and the unhindered market) to distribute the limited quantity of a deficit good among heterogeneous individuals. The authors show that, for the poor, the ranking of systems (from better to worse) is: convertible rations, nonconvertible rations, the queue system, and nonintervention. The rich are found to be better off under nonintervention than under other systems. These and other results are notably robust not only to many parameters of the economy, but also to certain types of commodity taxes and administrative costs. Copyright 1987 by American Economic Association.

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  • 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.
    • Handle: RePEc:aea:aecrev:v:77:y:1987:i:1:p:69-77
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    Cited by:

    1. Erwin Ooghe, 2019. "Markets, Queues, and Taxes," CESifo Working Paper Series 7910, CESifo.
    2. Amal Sanyal, 2004. "Bribes in a Supply Line," Economica, London School of Economics and Political Science, vol. 71, pages 155-168, February.
    3. Stéphanie Souche & Charles Raux, 2006. "Perception of the fairness of pricing," Post-Print halshs-00109055, HAL.
    4. 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 and Finance.
    5. Michael Sattinger, 2002. "A Queuing Model of the Market for Access to Trading Partners," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(2), pages 533-548, May.
    6. Ralph Bradburd & Stephen Sheppard & Joseph Bergeron & Eric Engler, 2006. "The Impact Of Rent Controls In Non‐Walrasian Markets: An Agent‐Based Modeling Approach," Journal of Regional Science, Wiley Blackwell, vol. 46(3), pages 455-491, August.
    7. Bennett, John & Dixon, Huw David, 1995. "Macroeconomic equilibrium and reform in a transitional economy," European Economic Review, Elsevier, vol. 39(8), pages 1465-1485, October.
    8. Alexeev, Michael & Sabyr, Lyaziza, 2004. "Black markets and pre-reform crises in former socialist economies," Economic Systems, Elsevier, vol. 28(1), pages 1-12, March.
    9. 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.
    10. Slobodan Djajić, 1999. "Shortages, Hoarding and Parallel‐Market Premia in an Economy with Administered Prices," Review of Development Economics, Wiley Blackwell, vol. 3(1), pages 1-10, February.
    11. Suwei Feng & Qiang Li, 2018. "Evaluating the car ownership control policy in Shanghai: a structural vector auto-regression approach," Transportation, Springer, vol. 45(1), pages 205-232, January.
    12. Kulshreshtha, Praveen, 2007. "An efficiency and welfare classification of rationing by waiting in the presence of bribery," Journal of Development Economics, Elsevier, vol. 83(2), pages 530-548, July.
    13. Souche, Stéphanie & Raux, Charles & Croissant, Yves, 2012. "On the perceived justice of urban road pricing: An empirical study in Lyon," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(7), pages 1124-1136.
    14. Jeremy Clark & Bonggeun Kim, 2007. "Paying vs. waiting in the pursuit of specific egalitarianism," Oxford Economic Papers, Oxford University Press, vol. 59(3), pages 486-512, July.
    15. Charles Raux & Stéphanie Souche & Yves Croissant, 2009. "How fair is pricing perceived to be? An empirical study," Public Choice, Springer, vol. 139(1), pages 227-240, April.
    16. Fridman, Alla, 1997. "Privatization and Price Liberalization: Comparative Analysis," Journal of Comparative Economics, Elsevier, vol. 24(3), pages 313-334, June.
    17. Bennett, John, 1998. "Prices versus quantities and distributional inefficiency," Economics Letters, Elsevier, vol. 58(1), pages 63-67, January.
    18. Nicholas Ryan & Anant Sudarshan, 2020. "Rationing the Commons," Working Papers 2020-93, Becker Friedman Institute for Research In Economics.
    19. Christoph Starke, 2010. "Serving the Many or Serving the Most Needy?," FEMM Working Papers 100002, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
    20. Suttner, Johannes R., 2014. "Sensitivity of economists during market allocation," CIW Discussion Papers 3/2014, University of Münster, Center for Interdisciplinary Economics (CIW).
    21. Christoph Starke, 2012. "Serving the many or serving the most needy?," Economics of Governance, Springer, vol. 13(4), pages 365-386, December.
    22. Leitzel, Jim, 1998. "Goods Diversion and Repressed Inflation: Notes on the Political Economy of Price Liberalization," Public Choice, Springer, vol. 94(3-4), pages 255-266, March.
    23. Amitrajeet Batabyal, 2005. "On bribing and balking in a simple queuing model of resource allocation," Economics Bulletin, AccessEcon, vol. 16(1), pages 1-10.
    24. Che, Yeon-Koo & Gale, Ian, 2006. "Market versus Non-Market Assignment of Initial Ownership," MPRA Paper 6095, University Library of Munich, Germany, revised 30 May 2006.
    25. Stephen Coate, 1986. "Should Food Aid Be Given Away or Sold During a Famine?," Discussion Papers 701, Northwestern University, Center for Mathematical Studies in Economics and Management Science.

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