Income Distribution and Price Controls: Targeting a Social Safety Net During Economic Transition

Michael Alexeev and James Leitzel

No 281, William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan

Abstract: During the ongoing post-communist economic transitions, the relative well-being of many people is changing rapidly, and governments are not well positioned to accurately measure individual living standards. Under such circumstances, continued price controls over basic consumer goods within the state sector, and the associated queuing, can form a serviceable device for targeting poor people for subsidies. With a fixed-price state sector and free-price parallel markets, rich people might choose to avoid queues and shop in the free markets, while poor people would prefer to pay low nominal prices and queue in the state sector. The targeting of subsidies through queues, therefore, can be accomplished even if the government has no information on individual income or living standards. When the alternative to price controls is a poorly targeted explicit social safety net, the resource cost of queues might be more than compensated for by an improvement in the targeting of subsidies.

Keywords: price controls; tax evasion; queue-rationing; economic transition; income distribution (search for similar items in EconPapers)
Pages: pages
Date: 1999-03-01
New Economics Papers: this item is included in nep-lab and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.wdi.umich.edu/files/Publications/WorkingPapers/wp281.pdf
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.wdi.umich.edu/files/Publications/WorkingPapers/wp281.pdf [302 Found]--> https://wdi.umich.edu/files/Publications/WorkingPapers/wp281.pdf)

Related works:
Journal Article: Income distribution and price controls: Targeting a social safety net during economic transition (2001)
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:wdi:papers:1999-281

Access Statistics for this paper

More papers in William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan 724 E. University Ave, Wyly Hall 1st Flr, Ann Arbor MI 48109. Contact information at EDIRC.
Bibliographic data for series maintained by WDI ().