Empirical Tests of Impacts of Rationing: The Case of Poland in Transition

Sonya Huffman () and Stanley Johnson

Center for Agricultural and Rural Development (CARD) Publications from Center for Agricultural and Rural Development (CARD) at Iowa State University

Abstract: This study tests the theory of rationing, examining changes in household consumption behavior during the transition to a market economy in Poland, 1987-92. Using pre-reform data from the Polish Household Budget Survey, Huffman and Johnson develop a model of consumption under rationing and derive virtual prices for food and housing. A pre-reform Almost Ideal Demand System (AIDS) model with rationing is then used to estimate plausible values for price and income elasticities. Comparing pre-reform and post-reform (without rationing) AIDS models shows that own-price elasticities for nonrational goods are larger after the reform, and there is increased complementarity and decreased substitutability for nonrationed goods. This comparison also shows a 75 percent decline in real household welfare over the transition to a market economy.

Date: 2000-02
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Related works:
Journal Article: Empirical tests of impacts of rationing: the case of Poland in transition (2004)
Working Paper: Empirical Tests of Impacts of Rationing: The Case of Poland in Transition (2004)
Working Paper: EMPIRICAL TESTS OF IMPACTS OF RATIONING: THE CASE OF POLAND IN TRANSITION (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:ias:cpaper:00-wp237

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