Income distribution and price controls: Targeting a social safety net during economic transition

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 fixedprice 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.

Should I stay or should I go? Hospital emergency department waiting times and demand

“…This result reflects findings from the ordeal mechanism literature which have emphasised how rationing by waiting (or administrative delays) can improve efficiency or improve targeting of programs provided free of charge (Alatas et al ; Alexeev & Leitzel, ; Parsons, ). In our context, the fact that patients in the lowest urgency category are most affected by waiting times may be interpreted as “targeting” emergency care at those who need it most.…”

“…A recent example has shown how small waiting and administrative burdens can help to “select” the most needy recepients of aid programs (Alatas et al ). Similarly, queueing can help efficiently target subsidised consumer goods to low income groups (Alexeev & Leitzel, ). Further, a classic paper by Parsons () shows rigorous enforcement and delays in applications for disability benefits reduce applications substantially.…”

Job security as a threatened resource: reactions to job insecurity in culturally distinct regions

“…Thirdly, by comparing two regions of Switzerland that differ in societal practices performance orientation and uncertainty avoidance (House et al, 2004), but that share similar socio-economic and legal contexts, we are able to hold a number of relevant and potentially confounding variables constant (e.g., social safety net; Alexeev & Leitzel, 2001). We are therefore able to isolate the effect of cultural dimensions on responses to both quantitative and qualitative job insecurity better.…”

Paying vs. waiting in the pursuit of specific egalitarianism

“…As noted by Nichols et al (1971), Barzel (1974), O'Shaughnessy (2000, and Alexeev and Leitzel (2001), allocating goods that are deemed essential to citizenship or life using queues rather than price can seem appealing in an egalitarian sense, because time is more evenly distributed than human or physical capital, or income.…”

“…As previously pointed out, however, imperfect information means that tax and transfer systems carry their own distortions in work disincentives (Tobin, 1970;Bucovetsky, 1984) and imperfect targeting (Alexeev and Leitzel, 2001). Similarly, user fees for congestible public services may have regressive distributional effects (Nichols et al, 1971).…”