Your Money or Your Time: Pricing, Queuing and Merit Good Egalitarianism
Abstract: We ask whether the objective of egalitarian allocation of a merit good could be achieved by making the good available at multiple outlets charging different money and time prices. Differential pricing could separate high and low wage buyers across outlets, and proportional allocation of supply could ensure that consumption is made independent of income, but dependent on relative strength of preference for the good. Thus, the standard efficiency costs of allocation by time are reduced. We find that differential pricing can achieve egalitarian distribution if preferences are homogenous and labour supply is upward sloping. Slight deviations occur if labour supply is backward bending, or preference for the merit good relative to other goods varies across the population.
Economic Keywords: queuing, egalitarianism, allocation by time
JEL Classification Codes: D30, D45, H31, I18