How Can They Differ for Quota Changes: Welfare Measurements of Partial and Full Demand Rationings

This article shows differences of welfare effects by quota changes under the partial and full demand rationings. The close relationship of welfare measurements between them is not well established and the significance of differences in welfare measurement between them is much less understood. Thus the close relationship between their associated welfare measurements is sketched. The simulation in this article shows that the magnitude of welfare measurement of full demand rationings is not closely related to that of welfare measurement of partial demand rationings in any parallel way as we first thought. The fundamental difference comes from different compensation schemes. It will add flexibility in the empirical analysis of welfare change and aggregate consumer behavior.