Estimating Welfare Effects of Rationed Good

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Aminkhaki, Alireza | 2019

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Type of Document: M.Sc. Thesis
Language: Farsi
Document No: 52149 (44)
University: Sharif University of Technology
Department: Management and Economics
Advisor(s): Vesal, Mohammad; Rahmati, Mohammad Hossein
Abstract:
Assuring households’ access to essential goods at economy’s hard times has always been of policymakers’ main concerns. Using Household’s Income and Expenditure Survey data during Iran-Iraq war during 80’s, we have calculated welfare and distribution effects of rationing by coupons of three essential goods in these years. We found that rationed quantities were inefficiently excessive and due to their significant low prices, they were overconsumed. Also, without any extra financial burden, government could have improved lowest income quantile’s aggregate utility by 5.2% or 5.6%, if cash subsidy equal to each household’s previous subsidy value or an equal per-capita subsidy were distributed instead of rationed per-capita quantities respectively
Keywords:
Rationing ; Subsidy ; Welfare Effects ; Welfare Distribution ; Goods Allocation

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