Differential Time and Money Pricing as a Mechanism for In-kind Redistribution
We propose a mechanism to implement the distributional goal of "specific egalitarianism", or that allocation of a good be independent of income, but increasing in relative strength of preference or need. Governments could offer the good at multiple "outlets" that charge different money and time prices. Individuals would self-select between outlets based on time opportunity cost. We show conditions under which differential pricing achieves specific egalitarianism more efficiently than uniform public provision funded from income tax, with or without optional private purchase. Differential pricing becomes more efficient than uniform provision as 1) the relative importance of the good rises, 2) the elasticity of substitution between goods falls, 3) variation in preferences increases and 4) income inequality rises or the proportion of the poor falls.
|Date of creation:||25 Feb 2006|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: 64 3 369 3123 (Administrator)
Fax: 64 3 364 2635
Web page: http://www.econ.canterbury.ac.nz
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.:
- 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.
- Boadway, R. & Marchand, M., . "The use of public expenditures for redistributive purposes," CORE Discussion Papers RP -1131, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Boadway, R. & Marchand, M., 1990. "The use of public expenditures for distributive purposes," CORE Discussion Papers 1990066, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Blomquist, Suren & Christiansen, Vidar, 1995. " Public Provision of Private Goods as a Redistributive Device in an Optimum Income Tax Model," Scandinavian Journal of Economics, Wiley Blackwell, vol. 97(4), pages 547-67, December.
- 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.
- M. L. Weitzman, 1974. "Is the Price System or Rationing More Effective in Getting a Commodity to Those Who Need It Most?," Working papers 140, Massachusetts Institute of Technology (MIT), Department of Economics.
- Sam Bucovetsky, 1984. "On the Use of Distributional Waits," Canadian Journal of Economics, Canadian Economics Association, vol. 17(4), pages 699-717, November.
- 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.
- 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.
- 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.
- Jeremy Clark & Bonggeun Kim, 2006. "Paying Vs. Waiting in the Pursuit of Specific Egalitarianism," Working Papers in Economics 06/08, University of Canterbury, Department of Economics and Finance.
- Sherwin Rosen, 2002. "Markets and Diversity," American Economic Review, American Economic Association, vol. 92(1), pages 1-15, March.
- 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.
- Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, August.
- 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.
- Michael Alexeev & James Leitzel, 1999.
"Income Distribution and Price Controls: Targeting a Social Safety Net During Economic Transition,"
William Davidson Institute Working Papers Series
281, William Davidson Institute at the University of Michigan.
- 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.
- 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.
- Polterovich, Victor, 1993. "Rationing, Queues, and Black Markets," Econometrica, Econometric Society, vol. 61(1), pages 1-28, January.
- 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.
- Tobin, James, 1970. "On Limiting the Domain of Inequality," Journal of Law and Economics, University of Chicago Press, vol. 13(2), pages 263-77, October.
When requesting a correction, please mention this item's handle: RePEc:cbt:econwp:06/07. 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: (Albert Yee)
If references are entirely missing, you can add them using this form.