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The Taxing Issue of Queues

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  • Terry O'Shaughnessy

Abstract

This paper examines the redistributional function of queues. A system in which subsidies and queues are used to allocate goods may appear attractive to policy makers who are concerned about equity since the resource used in queuing (time) is generally allocated more equally than, say, human or physical capital. Thus a subsidy-queue mechanism performs a role similar to that performed by a tax-benefit system. Both mechanisms, however, bring with them efficiency losses, which the paper compares. It is shown that the subsidy-queue mechanism may appear superior if the trade-off between efficiency and equity is viewed in terms of consumption and the distribution of consumption. On the other hand, if the equity-efficiency trade-off is properly formulated in terms of utility and the distribution of utility the tax-based redistributional mechanism is superior.

Suggested Citation

  • Terry O'Shaughnessy, 2000. "The Taxing Issue of Queues," Economics Series Working Papers 18, University of Oxford, Department of Economics.
    • Handle: RePEc:oxf:wpaper:18
    as

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    References listed on IDEAS

    as
    1. Lambert, Peter J., 1985. "Endogenizing the income distribution: The redistributive effect, and Laffer effects, of a progressive tax-benefit system," European Journal of Political Economy, Elsevier, vol. 1(1), pages 3-20.
    2. Stahl, Dale II & Alexeev, Michael, 1985. "The influence of black markets on a queue-rationed centrally planned economy," Journal of Economic Theory, Elsevier, vol. 35(2), pages 234-250, August.
    3. Lambert, Peter J., 1985. "Social welfare and the gini coefficient revisited," Mathematical Social Sciences, Elsevier, vol. 9(1), pages 19-26, February.
    4. Lambert, Peter J, 1990. "The Equity-Efficiency Trade-Off: Breit Reconsidered," Oxford Economic Papers, Oxford University Press, vol. 42(1), pages 91-104, January.
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    More about this item

    Keywords

    redistribution; queues; subsidies; tax-benefit system.;
    All these keywords.

    JEL classification:

    • D60 - Microeconomics - - Welfare Economics - - - General
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General

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