The Distributional Consequences of Paid-Priority Queues

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.