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Seoul Journal of Economics - Vol. 36 , No. 4
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Seoul Journal of Economics - Vol. 36, No. 4, pp. 357-388
Abbreviation: SJE
ISSN: 1225-0279 (Print)
Print publication date 30 Nov 2023
Received 23 Oct 2023 Accepted 03 Nov 2023
DOI: https://doi.org/10.22904/sje.2023.36.4.001

Differential time and money pricing as a mechanism for in-kind redistribution
Jeremy Clark ; Bonggeun Kim
Department of Economics and Finance, University of Canterbury, Christchurch, New Zealand (jeremy.clark@canterbury.ac.nz)
Department of Economics, Seoul National University, 1 Gwanak-ro, Gwanak-gu, Seoul 08826, South Korea (bgkim07@snu.ac.kr)

JEL Classification: D30, D45, H31, I18

Abstract

We propose that differential pricing can be used to implement the distributional goal of “specific egalitarianism”, or that allocation of a good be independent of income, but increasing in relative strength of preference or need. Governments could provide the good at multiple “outlets” offering different money and time prices. Individuals would self-select based on time opportunity cost. We show that differential pricing achieves specific egalitarianism more efficiently than tax-funded uniform public provision as the 1) relative importance of the good rises, 2) elasticity of substitution between goods falls, 3) variation in preferences increases and 4) proportion of the poor falls or income inequality rises.

Keywords: In-kind provision, Specific egalitarianism, Differential pricing
Acknowledgments

For helpful comments we wish to thank Michael Hoy, and participants at the CPEG session of the Canadian Economics Association Meeting in Calgary, as well as seminar participants in the Economics Departments at the University of Guelph and New South Wales. Conference travel funding from the Business School of the University of Canterbury is gratefully acknowledged.

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