The Distributional Consequences of Paid-Priority Queues

TL;DR

This paper analyzes how paid-priority queues affect different income groups, showing high-income individuals benefit while low-income individuals are worse off, with middle-income preferences being ambiguous.

Contribution

It demonstrates that income, not service valuation, determines willingness to adopt priority queues, revealing distributional effects of such systems.

Findings

High-income individuals benefit from priority queues.

Low-income individuals are worse off with priority queues.

Middle-income individuals have ambiguous preferences.

Abstract

This note examines the distributional implications of introducing a fast-track queue for accessing a service when agents are heterogeneous in both income and service valuation. Relative to a single free queue, I show that willingness to adopt the priority system is determined solely by income, regardless of service valuation. High-income individuals benefit from the fast-track access, while low-income individuals are worse off and remain in the free line. Middle-income individuals weakly prefer the single free queue; yet, under the priority regime, they pay for fast-track access. Thus, the use of the priority queue does not reveal preferences for the priority system.