Welfare Trade-offs between Transferable and Non-Transferable Lotteries

Adrienne Ohler, Hayley Chouinard () and Jonathan Yoder ()

No 7363, 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon from Western Agricultural Economics Association

Abstract: 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.

Keywords: Resource/Energy; Economics; and; Policy (search for similar items in EconPapers)
Pages: 31
Date: 2007
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://ageconsearch.umn.edu/record/7363/files/sp07oh01.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:waeapo:7363

DOI: 10.22004/ag.econ.7363

Access Statistics for this paper

More papers in 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon from Western Agricultural Economics Association Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().