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Rationing

Rationing is the controlled distribution of resources: it restricts how much people are allowed to buy or consume. Rationing, for whatever reason, controls the size of the ration, one's allotted portion of the resources being distributed on a particular day or at a particular time.

Rationing has long been used in the military, especially the navy, to make supplies last for a defined duration, such as a voyage. To ration the supplies, they are divided up into equal portions for each person for each day, or even a meal, over the expected voyage period. The objective is to ensure that each person receives a fair share of supplies throughout the voyage. Often some reserve was also held. If supplies ran short or the voyage went longer than expected, the ration portions would be reduced. For Example: Half Rations means the portions are cut in half, making the supplies last twice as long.

Rationing is often instituted during wartime for civilians as well. 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 gasoline. Towards the end of the First World War, panic buying in Britain prompted rationing of first sugar, then meat, for the rest of the war. During World War II rationing existed in many countries including Britain and the United States. The British Ministry of Food refined the process in the early 1940s to ensure the population did not starve when food imports were severely restricted and local production limited due to the large number of men fighting the war. Rationing did not end in Britain until the 1950s - see also British cuisine.

In market economics, rationing restricts demand. It may be applied when, by law, the price is set lower than the equilibrium market price determined by the process of supply and demand.

A reason for setting the price lower may be that there is a shortage, which drives the market price very high. High prices, especially in the case of necessities, are unacceptable with regard to those who cannot afford them.

In the case that the price is set lower the reason of rationing is to avoid that what can be obtained is too much determined by chance and dependent on long waiting in queues.

An example of rationing in the face of rising prices took place in the Netherlands, where there was rationing of gasoline in the 1973 energy crisis, and in the United States where there were similar efforts during the 1979 energy crisis.

In the absence of road pricing, roads are rationed in a first come, first serve queueing process, leading to congestion.

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