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

Raaj Sah ()

American Economic Review, 1987, vol. 77, issue 1, 69-77

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.

Date: 1987
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Handle: RePEc:aea:aecrev:v:77:y:1987:i:1:p:69-77