[OPE-L] Rationing/price control.

From: Alejandro Agafonow (alejandro_agafonow@YAHOO.ES)
Date: Fri Aug 03 2007 - 13:56:02 EDT

Dear David:
Howard Bowen, “The Interpretation of Voting in the Allocation of Economic Resources”, The Quarterly Journal of Economics, Vol. 58, Nº 1 (Nov. 1943).
The above paper (attached herewith) just could be indirectly useful for you. Bowen used an interesting way of representing a sort of demand curves on page 47. He was worried about voting preferences and represented voters’ preferences over the quantity of public goods, grouping them by social classes.
I took the idea translated to the demand of health services, to represent poor people’s quantity loos of service in case of market allocation, compared with the equitable rationing by the State. My interpretation of Bowen’s graph is in: “The Limits of Economic Efficiency in a Democratic Society” (Spanish), Revista de Economía Institucional, Vol. 9, Nº 16, 2007. www.economiainstitucional.com
I found interesting your conclusion about the neutrality of microeconomics tools concerning policy conclusions, but concerning distribution issues it is difficult to say that, because we have different conclusion if you accept the law of decreasing marginal utility of income as Arthur Pigou did or if you reject some assumption of the said law as Lionel Robbins did.
Best regards,
Alejandro Agafonow

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