The Taxing Issue of Queues

Terry O'Shaughnessy

No 18, Economics Series Working Papers from University of Oxford, Department of Economics

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.

Keywords: redistribution; queues; subsidies; tax-benefit system. (search for similar items in EconPapers)
JEL-codes: D60 H20 (search for similar items in EconPapers)
Date: 2000-07-01
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