Empirical Tests of Impacts of Rationing: The Case of Poland in Transition

This study tests hypothesis derived from the theory of rationing using data for Polish households during the transition. The demand system consists of six commodity groups, and virtual prices are derived for the rationed goods. The empirical results are consistent with the theory: larger own-price elasticities for non-rationed goods after the reform, increased complementarity and decreased substitutability. The results also show that households did not suffer declines in welfare that were as large as officially reported.