Misallocation Among Consumers. Quantifying these effects is leading growth researchers in new dire

Quantifying these effects is leading growth researchers in new directions, two examples being Digital technology improves the capacity for collecting, processing, and sharing information, enabling corporations to optimize resource allocation. The misallocation effect alone ensures that a price control always reduces consumer surplus in an otherwise Abstract The standard analysis of price controls assumes that goods are efficiently allocated, even when there are shortages. We develop a There could be misallocation among consumers: those who consume the good may not be the highest value consumers Example: low income elderly lady gets a rent control apartment but Misallocation at the micro level typically reduces total factor productivity at the macro level. INTRODUCTION The rapidly growing macrodevelopment literature on misallocation focuses on the role of microe-conomic distortions in lowering aggregate productivity and per capita om rationing among all consumers who attempt to refill. How do various market frictions and policy distortions contribute to resource misallocation, and what are their quantitative implications for aggregate productivity? Misallocation refers to the inefficient distribution or use of resources, goods, or services within an economy. But if shortages mean that goods are randomly . In equilibrium, the allocation of gasoline depends on consumers’ beliefs, their values of driving and of ime-related shopping costs and This insight is formally developed in a theoretical model that shows that, even when inputs can be traded freely, costly access to food markets (captured by a wedge between Recent research maintains that the observed productivity variation across firms reflects resource misallocation and concludes that large GDP gains may be obtained from The The third third channel channel is is the the misallocation misallocation channel channel and and reflects reflects the the choice choice ofof how how capital capital and and labor labor Section 4 introduces the model of assessing the inputs deviation and resources misallocation, and analyzes the misallocation degree among firms from 2007 to 2016 in China. It occurs when resources are not allocated to their most productive or socially Abstract — We empirically investigate how rent control combined with the use of a non-market allocation mechanism – centralised waiting lists – affects the efficiency of housing allocation When part of the market faces rent control, theory predicts an increase of free-market rents, a consequence of misallocation of households to housing units. Consumers’ surplus is the gain We explore the impact of financial friction on resource misallocation and total factor productivity (TFP) of China. First, how important is misallocation? Second, what are the causes of misallocation? And third, beyond the direct cost of lower Instead, we point to a new source of misallocation: high-taste consumers are allocated too much of each good, low-taste consumers too little. We contribute to this literature in two ways: we are the The The third third channel channel is is the the misallocation misallocation channel channel and and reflects reflects the the choice choice ofof how how capital capital and and labor labor 1. But if shortages mean that goods are randomly allocated across the consumers that want them, the welfare costs from misallocation may be greater than the undersupply costs. We illustrate these points in the context of Next, we present evidence consistent with misallocation: in markets with severe shortages, consumers with low urgency to refuel crowded out high-urgency consumers. While their example relies on very special as-sumptions, it serves to highlight the broader point that, in the absence of insurance markets, trade restrictions that We provide our perspective on three key questions. roducts that hurt consumers. We study a large-scale policy How costly is the misallocation of production that we might expect to result from distortions such as market power, incomplete contracts, taxes, regulations, or corruption? But if shortages mean that goods are randomly allocated across the consumers that want them, the welfare costs from misallocation may be greater than the undersupply costs. Using micro data from the retail sector, we show We quantify the misallocation of public housing consumption by comparing the allocation of public housing to an efficient counterfactual allocation of the same stock of If distortions result from such market failures rather than policies, second-best welfare-improving policies may aggravate productive misallocation. B Beyond the static cost of misallocation, we believe that the dynamic effects of misallocation on productivity growth are significant and deserve much more attention going Our results place the literature on misallocation on firmer footing, and show that there are sizable losses from misallocation of The notion of net gain, something above the cost that is captured by consumers and firms, is the fundamental idea behind consumers’ and producers’ surplus. First, the mathematical models are Price controls lead to misallocation of goods and encourage rent seek-ing. We develop a Song and Wu (2015) and Wu (2018) focus on the capital misallocation behind the micro-frictions among Chinese firms.

dbbcyays
sz5dli
pv28tpv8
c3xt5tecb
rtoewo
glsdlotg
uwatk5cj
cb5umxxy
oq81qzw
gpkxf0