Welfare Trade-offs between Transferable and Non-Transferable Lotteries
The Four Rivers lottery run by the National Forest Service distributes the opportunity to raft four sections of rivers in Idaho through a non-transferable lottery. The restriction of trade and focus on equity in distribution creates a deadweight loss in total surplus compared with a market or auction system. If the NFS allowed the transferring of permits, then there exists a potential for rafters to gain surplus in trade. However, non-rafters have an incentive to enter the transferable lottery to make a profit from trade. Using the NFS lottery as a guide, this paper examines welfare under the two lottery system to understand how changes in transferability affect the welfare of users and non-users, and the revenues of the government. Since variables, such as number of permits, permit fees, and application fees, also impact welfare, we derive comparative statics for these variables to demonstrate how these government controls affect rafter welfare, non-rafter welfare, and government revenue differently under transferable and non-transferable lotteries. Our results show the welfare trade-offs rafters have between transferable and non-transferable lotteries.
|Date of creation:||2007|
|Date of revision:|
|Contact details of provider:|| Web page: http://waeaonline.org/|
More information through EDIRC
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.:
- M. L. Weitzman, 1973.
"Prices vs. Quantities,"
106, Massachusetts Institute of Technology (MIT), Department of Economics.
- Eichberger, J. & Güth, W. & Müller, W., 2003. "Attitudes towards risk : An experiment," Other publications TiSEM 801c3440-0ba5-49f7-bb3b-c, Tilburg University, School of Economics and Management.
- Creel, Michael D. & Loomis, John B., 1992. "Modeling hunting demand in the presence of a bag limit, with tests of alternative specifications," Journal of Environmental Economics and Management, Elsevier, vol. 22(2), pages 99-113, March.
- Jensen, Jesper & Rasmussen, Tobias N., 2000. "Allocation of CO2 Emissions Permits: A General Equilibrium Analysis of Policy Instruments," Journal of Environmental Economics and Management, Elsevier, vol. 40(2), pages 111-136, September.
- Scrogin, David & Berrens, Robert P. & Bohara, Alok K., 2000. "Policy Changes And The Demand For Lottery-Rationed Big Game Hunting Licenses," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 25(02), December.
- Scrogin, David, 2005. "Lottery-rationed public access under alternative tariff arrangements: changes in quality, quantity, and expected utility," Journal of Environmental Economics and Management, Elsevier, vol. 50(1), pages 189-211, July.
- Nickerson, Jack A. & Vanden Bergh, Richard, 1999. "Economizing in a context of strategizing: governance mode choice in Cournot competition," Journal of Economic Behavior & Organization, Elsevier, vol. 40(1), pages 1-15, September.
- Boyce, John R, 1994. "Allocation of Goods by Lottery," Economic Inquiry, Western Economic Association International, vol. 32(3), pages 457-76, July.
When requesting a correction, please mention this item's handle: RePEc:ags:waeapo:7363. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.