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Welfare change and the elimination of the shortage economy in Russia: some representative‐household results1

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  • Bryan W. Roberts

Abstract

The welfare consequences of eliminating the shortage economy for the representative Russian household are quantitatively assessed. Before price liberalization, households either bought goods and services at state prices and paid searching and queuing costs, or they bought on parallel markets at higher monetary prices. An equation is derived that permits empirical evaluation of the extent to which welfare gains from eliminating searching and queuing costs offset welfare losses from falling real consumption. Available data suggest that when regime change was initiated in Russia in 1992, welfare gains from eliminating shortage were substantial and may have completely offset welfare losses from falling real consumption.

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  • Bryan W. Roberts, 1997. "Welfare change and the elimination of the shortage economy in Russia: some representative‐household results1," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 5(2), pages 427-451, November.
    • Handle: RePEc:bla:etrans:v:5:y:1997:i:2:p:427-451
    DOI: 10.1111/j.1468-0351.1997.tb00024.x
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    References listed on IDEAS

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    1. Mr. Steven T Phillips & Mr. Vincent Koen, 1993. "Price Liberalization in Russia: Behavior of Prices, Household Incomes, and Consumption During the First Year," IMF Occasional Papers 1993/004, International Monetary Fund.
    2. Evgeny Gavrilenkov & Mr. Vincent Koen, 1994. "How Large Was the the Output Collapse in Russia? Alternative Estimates and Welfare Implications," IMF Working Papers 1994/154, International Monetary Fund.
    3. David Lipton & Jeffrey D. Sachs, 1990. "Creating a Market Economy in Eastern Europe: The Case of Poland," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 21(1), pages 75-148.
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    Cited by:

    1. Raiser, Martin & Schaffer, Mark & Schuchhardt, Johannes, 2004. "Benchmarking structural change in transition," Structural Change and Economic Dynamics, Elsevier, vol. 15(1), pages 47-81, March.
    2. Kenneth Smith, 2003. "Individual Welfare in the Soviet Union," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 64(1), pages 75-105, October.

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