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Politics : A US National Health Care System?

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From: TimF	11/11/2009 9:07:19 PM
	1 Recommendation Read Replies (1) of 42652

Price Ceilings and Queues It's well known in economics that when price ceilings are in effect, leading to shortages, other rationing systems come into place. Queues are one example. I ask my students if price ceilings help direct a good to people who can't afford it. My answer is no, not necessarily. I ask them what if the only non-price rationing system was a queue. Wouldn't that ensure that the least fortunate (those with the lowest value of time) get the good. My answer is no, not necessarily. Why? Because those with a higher value for time can (if they have the cash) can pay others to wait in line for them. But does this really happen. Um, yeah. An unemployed Gatineau man has been doing a modest but steady business in the past week by standing in line at flu clinics for people who can’t line up themselves. And he says the city’s security measures haven’t slowed him down. For $15 an hour, the man who calls himself Johnny Z lines up for hours to get the ticket, or more recently the wristband, that entitles the wearer to a flu shot. The person who hires him takes his wristband and comes to the clinic for a shot later in the day. From Canada, hat tip to Tyler Cowen. I saw kids do this for World Series tickets for scalpers in Los Angeles many years ago (sorry, Angel and Dogder fans!) sometimes getting in line before midnight for a sale the following morning. The Canadian health system tried to switch from tickets to wristbands to restrict reselling, but Johnny's found a workaround for that. Goods and services tend to go to those most willing and able to pay for them. Limiting the ability of prices to ration goods doesn't change this tendency. It drives people to find ways around the rules, just like water always tries to get around barriers keeping it from seeking the deep. Posted by Phil Miller on November 06, 2009 marketpower.typepad.com

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