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Is the Price System or Rationing More Effective in Getting a Mask to Those Who Need It Most?

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  • Alistair Munro

    (National Graduate Institute for Policy Studies (GRIPS))

Abstract

Weitzman’s classic insight on the virtues of allocating a scarce good via the price system or through rationing is applied to the problem of distributing masks, when the use of a mask provides a positive external benefit. I show that if a market leaves some individuals without a mask (when potentially there is supply for all), then rationing may be the superior option. When the variation in need is small, then even if the external effect of mask wearing is approximately equal to the personal benefit, even 10–20% maskless in the population may justify rationing.

Suggested Citation

  • Alistair Munro, 2020. "Is the Price System or Rationing More Effective in Getting a Mask to Those Who Need It Most?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 76(4), pages 655-663, August.
    • Handle: RePEc:kap:enreec:v:76:y:2020:i:4:d:10.1007_s10640-020-00485-2
    DOI: 10.1007/s10640-020-00485-2
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    References listed on IDEAS

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    1. Todd Sandler & Daniel G Arce M, 2002. "A conceptual framework for understanding global and transnational public goods for health," Fiscal Studies, Institute for Fiscal Studies, vol. 23(2), pages 195-222, June.
    2. Richard Cornes, 1993. "Dyke Maintenance and Other Stories: Some Neglected Types of Public Goods," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(1), pages 259-271.
    3. Francisco Rivera-Batiz, 1981. "The Price System vs. Rationing: An Extension," Bell Journal of Economics, The RAND Corporation, vol. 12(1), pages 245-248, Spring.
    4. Martin L. Weitzman, 1977. "Is the Price System or Rationing More Effective in Getting a Commodity to Those Who Need It Most?," Bell Journal of Economics, The RAND Corporation, vol. 8(2), pages 517-524, Autumn.
    5. Roberts, Marc J. & Spence, Michael, 1976. "Effluent charges and licenses under uncertainty," Journal of Public Economics, Elsevier, vol. 5(3-4), pages 193-208.
    6. Nicole C. J. Brienen & Aura Timen & Jacco Wallinga & Jim E. Van Steenbergen & Peter F. M. Teunis, 2010. "The Effect of Mask Use on the Spread of Influenza During a Pandemic," Risk Analysis, John Wiley & Sons, vol. 30(8), pages 1210-1218, August.
    7. Martin L. Weitzman, 1974. "Prices vs. Quantities," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 41(4), pages 477-491.
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    RePEc Biblio mentions

    As found on the RePEc Biblio, the curated bibliography for Economics:
    1. > Economics of Welfare > Health Economics > Economics of Pandemics > Specific pandemics > Covid-19 > Health > Allocation and rationing

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