Queue for redistribution!

A few days ago I had to queue for four hours to see a dentist at a National Health Service (NHS) walk-in emergency centre. Furthermore, this was no 'virtual' queue: no 'the doctor can't see you now but let's book you an appointment for 7pm tomorrow', no 'grab the number 42 ticket, expected waiting time 4 hours' so I could go away and do something else in the meantime. I had to physically be there for as long as it would take before an (excellent, as it turned out) dentist could see me.

It's not difficult to spot the inefficiency here: instead of queueing, I could have been doing something productive - like enjoying my leisure time, or posting on this blog. What is more difficult to see, however, is the redistibutive effect. Making it inconvenient to consume public services is in some respects equivalent to a very progressive consumption tax.

The whole idea of having the NHS is that everyone should have access to medical care, regardless of how healthy their bank account is. This creates a problem: make something free, and demand for it will skyrocket. One way to restrict this demand is to start charging money for it, but this beats the whole purpose. Queues are a non-monetary alternative: they impose a very real cost to the user at the point of delivery, and, as a bonus, a very progressive one too.

Saying 'make the NHS free but NOT for those who can afford private health care' is not advisable: the rich are people too, and - more to the point - they have the vote. Furthermore, why should you exclude them from public services if they are willing to pay the 'inconvenience price' attached to them? (I find the anecdote about the founder of IKEA spending hours haggling over the price of vegetables with his grocer very amusing but, hey, it's his utility function to maximise.)

Instead, you say 'make the NHS free for everyone, and allow queues to form so that those that can afford it go private'. That way, you hit two birds with one stone: you raise the 'price' of public services at the point of delivery so that less is consumed by everyone, and at the same time you set this 'price' at a disproportionately high level for the rich.

I don't know whether they compute 'queue elasticities of demand' for the various procedures at the NHS - but they should, and break the estimates down by economic class as well. The richer you are, the less inclined to queue you are likely to be - you can better afford private care, you could be making more money if you were at work instead, and (by virtue of your higher income) you are likely to value your free time more too.

That leaves us with the inefficiency. Whether that's an acceptable price to pay to achieve redistributive ends boils down to taste, and is the purview of normative economics. As far as positive analysis is concerned, taxes on income (that other potent force for redistribution) are associated with particularly large deadweight losses too, and there are limits to how progressive they can be made to be: at the very least, people work less at the margin; at the extreme, they do a Mick Jagger and move abroad.

It's difficult to find the data to test for this, but it may well be the case that queueing for public services may be a better way to redistribute than taxes on income. Any progress with those queue elasticity of demand estimates?

Postscript 1: Funny word, q-ue-ue. Feels like the ue's are patiently lining up to get to the q.
Postscript 2: For those interested in the 'human element' of all this, my tooth pain is almost gone, thank you.

by datacharmer | Monday, July 16, 2007
  , | | Queue for redistribution! @bluematterblogtwitter


  1. Anonymous Says:

    "Queue" is also the only five-letter word where you can remove four letters and not alter the sound.