Queues, rations and market: Comparisons of
outcomes for the poor and the rich

Raaj Kumar Sah

American Economic Review, Volume 77, Number 1, March 1987, pages 69-77.

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ABSTRACT

This paper compares outcomes of alternative allocation systems (queues, convertible and nonconvertible rations, and unhindered market) to distribute limited quantity of a deficit good among heterogeneous individuals. It is shown that, for the poor, the ranking of systems (from better to worse) is convertible rations, nonconvertible rations, queues, and nonintervention. The rich are better off under nonintervention than under other systems. These and other positive results are robust to certain types of commodity taxes and administrative costs.


Reprinted in:

Readings in microeconomic theory, edited by Manfredi M. A. La Manna. Dryden, London, 1997.


Previous working versions include:

“Queues, rations and markets: Comparisons of outcomes for the poor and the rich.” Yale University, Department of Economics. Economic Growth Center, Center discussion paper number 504. June 1986.