Paying Vs. Waiting in the Pursuit of Specific Egalitarianism

Posted: 24 Jun 2008

See all articles by Jeremy E. Clark

Jeremy E. Clark

University of Canterbury, New Zealand - Department of Economics

Bonggeun Kim

Hanyang University - Economics

Date Written: July 2007

Abstract

We propose an allocation mechanism for publicly providing a private good such that the final allocation is independent of income yet increasing in strength of preference or need. The ‘pay or wait’ mechanism consists of offering the good for sale at two outlets. The ‘queuing’ outlet charges a low money price, but high waiting time per unit. The ‘pricing’ outlet charges a relatively high money price with rapid service. High wage individuals will opt for the pricing outlet, and low wage individuals the queuing outlet. If the policy maker stocks the outlets in proportion to the distribution of wage earners in the population, consumers of both wages will purchase the same amount on average, while those who value the good more relative to other goods will receive more of it. These outcomes are at risk if the good can be resold, but may be preserved if the policy maker can create transactions costs associated with resale.

Keywords: JEL classifications: D30, D45, H31, I18

Suggested Citation

Clark, Jeremy Edmund and Kim, Bonggeun, Paying Vs. Waiting in the Pursuit of Specific Egalitarianism (July 2007). Oxford Economic Papers, Vol. 59, Issue 3, pp. 486-512, 2007, Available at SSRN: https://ssrn.com/abstract=1150589 or http://dx.doi.org/10.1093/oep/gpm004

Jeremy Edmund Clark (Contact Author)

University of Canterbury, New Zealand - Department of Economics ( email )

Private Bag 4800
Christchurch
New Zealand

Bonggeun Kim

Hanyang University - Economics ( email )

Seoul 133-791
Korea
+82-2-2220-1025 (Phone)

HOME PAGE: http://www.hanyang.ac.kr/search/new/eindex.html

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