Abstract
Rationing occurs whenever economic agents face quantity constraints on their demand for or supply of particular commodities. This article reviews the main results of rationing theory: a tightening of a ration constraint raises the demand for unrationed substitutes and reduces the price responsiveness of all unrationed goods (the Le Chatelier effect). It shows how the technique of virtual prices can be used to generalize these results to the case of strictly binding rations, and briefly reviews some applications, empirical and theoretical, of rationing theory to public and environmental economics, fix-price macroeconomics, and the effects of quotas on international trade.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Bibliography
Anderson, J.E., and J.P. Neary. 1992. Trade reform with quotas, partial rent retention and tariffs. Econometrica 60: 57–76.
Deaton, A.S. 1981. Theoretical and empirical approaches to consumer demand under rationing. In Essays in the theory and measurement of consumer behaviour in honour of Sir Richard Stone, ed. A. Deaton. Cambridge: Cambridge University Press.
Deaton, A., and J. Muellbauer. 1981. Functional forms for labour supply and commodity demands with and without quantity constraints. Econometrica 49: 1521–1532.
Guesnerie, R., and K.W.S. Roberts. 1984. Effective policy tools and quantity controls. Econometrica 52: 59–86.
Hausman, J.A. 1985. The econometrics of nonlinear budget sets. Econometrica 53: 1255–1282.
Neary, J.P., and K.W.S. Roberts. 1980. The theory of household behaviour under rationing. European Economic Review 13: 25–42.
Neary, J.P., and J.E. Stiglitz. 1983. Towards a reconstruction of Keynesian economics: Expectations and constrained equilibria. Quarterly Journal of Economics 98(Supplement): 199–228.
Roberts, K. 1999. Rationality and the Le Chatelier Principle. Journal of Economic Theory 87: 416–428.
Rothbarth, E. 1941. The measurement of changes in real income under conditions of rationing. Review of Economic Studies 8: 100–107.
Samuelson, P.A. 1947. Foundations of economic analysis. Cambridge, MA: Harvard University Press.
Tobin, J., and H.S. Houthakker. 1950–51. The effects of rationing on demand elasticities. Review of Economic Studies 18: 140–153.
Weitzman, M. 1977. Is the price system or rationing more effective in getting a commodity to those who need it most? Bell Journal of Economics 8: 517–524.
Author information
Authors and Affiliations
Editor information
Copyright information
© 2018 Macmillan Publishers Ltd.
About this entry
Cite this entry
Neary, J.P. (2018). Rationing. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_1848
Download citation
DOI: https://doi.org/10.1057/978-1-349-95189-5_1848
Published:
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-95188-8
Online ISBN: 978-1-349-95189-5
eBook Packages: Economics and FinanceReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences