Rationing

Rationing is the controlled distribution of resources, goods, services, especially when scarce, or an artificial restriction of demand. Rationing controls the size of the ration, which is one's allowed portion of the resources being distributed on a particular day or at a particular time. There are many forms of rationing, although rationing by price is most prevalent.

Rationing is often done to keep price below the market-clearing price determined by the process of supply and demand in an unfettered market. Thus, rationing can be complementary to price controls. An example of rationing in the face of rising prices took place in the various countries where there was rationing of gasoline during the 1973 energy crisis.

A reason for setting the price lower than would clear the market may be that there is a high input , which would drive the market price very high. High prices, especially in the case of necessities, are undesirable with regard to those who cannot afford them. However, economists point out that high prices act to reduce waste of the scarce resource, while also providing incentive to produce more.

Rationing using ration stamps is only one kind of non-price rationing. For example, scarce products can be rationed using queues. This is seen, for example, at amusement parks, where one pays a price to get in and then need not pay any price to go on the rides. Similarly, in the absence of road pricing, access to roads is rationed in a first come, first served queueing process, leading to congestion.

Authorities which introduce rationing often have to deal with the rationed goods being sold illegally on the black market. Despite the fact that rationing systems are sometimes necessary as the only viable option for societies facing severe consumer goods shortages, they are usually extremely unpopular with the general public, as they enforce limits on individual consumption.

Rationing for civilians has most often been instituted during wartime. For example, each person may be given "ration coupons" which allow them to purchase a certain amount of a product each month. Rationing often includes food and other necessities for which there is a shortage, including materials needed for the war effort such as rubber tires, leather shoes, clothing, and fuel.

Rationing of food and water may also become necessary during an emergency, such as a natural disaster or terror attack.

In the U.S., the Federal Emergency Management Agency (FEMA) has established guidelines for rationing food and water when replacements are not available. According to FEMA standards, every person should have a minimum of 1 US quart (0.95 L) per day of water, and more for children, nursing mothers, and the ill.