On this news item making the headlines - depending on the scenario, allowing/disallowing people with invisible disabilities to jump/not jump the queue has an obvious information problem in economics, namely:
1) Those
who don’t really need to jump the queue but will do so anyway.
2) Those
who do really need to jump the queue but now can’t.
Even if we overlook a further issue – that there are people who potentially suffer more in queues that don’t get to skip the queue – this is still a classic economics problem of how to allocate scarce resources optimally when demand exceeds supply. As regular readers will know, there is nothing better than the market price system to allocate resources efficiently – so here we’d need a price system mechanism that also enables fairness and transparency alongside efficiency.
In a previous post some years ago, I warned of the dangers of demand inflation with increased blue badge allocation - that is, when more people qualify or apply than the system (in this case, parking spaces) can efficiently serve. What’s strange about demand inflation problems is that they are so obvious, easy to understand, and so predictable that it’s strange that the policymakers either totally ignore the trade offs, or act as though the problem won’t materialise. The man with a chronic lung condition who can’t find a parking space in the town centre because the eligibility increased criteria prioritised a less severe need has reasonable grounds to be aggrieved. Similarly, a policy like the above means that priority queues become overcrowded, and wait times rise for disabled guests themselves, thereby increasing the chances that more severely disabled people wait even longer. Because the system doesn’t price in different disabilities (as far as I know), the problems that arise become a predictable outcome of non-priced allocation under rising demand, just as they would if the items in question were bananas, coffee or laptops.
Given that any market-based mechanism would ideally balance three goals for this case: efficiency (optimal waiting times), equity (prioritising greatest need), and legitimacy (public perception of fairness), I’ve thought of three potential solutions, but they are all likely to disappoint one group.
1) Differential pricing for priority access: that is, a sliding-scale pricing depending on
demand levels, which depends on severity of disability. Prices would act as
signals that encourage only those who truly need or value priority access to
use it at peak times.
2) Market-compatible
subsidies, such as means-tested disability credits.
3) Time
slots in queues: that is, instead of unlimited queue access, visitors could
select ride time slots. When time slots are scarce, small tradeable allocations
could allow flexibility and reduce congestion in peak queue times.
I think, given this is a difficult problem, those 3 options are probably the best I can come up with. But….there are significant issues with all 3. The main issue with differential pricing is that tying queue access to prices or severity risks appearing to monetise disability, and may disadvantage genuinely vulnerable people who are less able or willing to pay. The main issue with the market-compatible subsidies is that means-testing and credit systems introduce administrative complexity, and someone has to pick up the cost of that. And the main issue with time-slot allocations is that they impose spillover costs on non-disabled customers and on the business owners who cannot offer the same level of service as broadly or equitably.
No, I think no solution truly satisfies, because this is a complex Hayekian knowledge problem to solve – and probably impossible to resolve in a Pareto efficient manner (by making no other party worse off) without one or more groups feeling hard done by.
Further reading: The Economics Of Queuing, Booking & Paying
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