“Well, there doesn’t need to be if you subsidise such that the prices faced by the disabled are the same as the prices faced by able bodied people.”

The price for cleaning a soiled room is already the same, it’s the fact that being blind makes you more likely to soil it in this case. A good example of how subsidies are inefficient is the cost of food and care for the guide dog. I think your principle suggests society should pay for this as well, but this is “over-compensation” in the case where the person would have owned a dog regardless of being blind. Or, how many taxi chits should we give out to replace the ability to drive? It just seems that before long you’re going to have to settle for an average cash disbursement.

I suspect the general result I’m searching for is that subsidies are only efficient where blindness perfectly discriminates between the high cost and the low cost users.

Well, there doesn’t need to be if you subsidise such that the prices faced by the disabled are the same as the prices faced by able bodied people.

“The point still holds that for any given utility curve the cash transfer is cheaper than the subsidy”

That’s certainly true, but there are, of course, costs associated with the inefficiency of lump sum payments. I’m not wholly opposed to lump sum payments, but I don’t think that it’s a theoretical slam-dunk either way 😉

Well, if we’re going to stick to what’s possible we can’t really compensate people through subsidies either because there’s no way to identify the consumption basket they would have chosen if they weren’t disabled. The point still holds that for any given utility curve the cash transfer is cheaper than the subsidy (and that’s even before we consider the externality cost of subsidizing things to below their true cost). Choosing an average level of compensation for everyone with a given level of disability seems like a pretty common real world solution, and a relatively fair one when there’s no way ascertain the individual cost of a disability.

Very good, I like your style 😉

I don’t deny that it involves a value judgment. There are many restrictions on the free exercise of property rights and I don’t think that my first proposition would be an undue constraint. It’s a value judgment that I don’t shy from. Lump sum payments can be useful, but they obviously over compensate as many people as they undercompensate and those inefficiencies may not be insignificant. I don’t think it’s a killer blow to the idea of lump sum transfers, but certainly important enough that it shouldn’t be disregarded.

Huh, wouldn’t higher hotel prices reduce demand for hotels?

“However, the value judgment that disabled peoples’ right to be free of discrimination trumps businesses’ right to price discriminate is, hopefully, fairly uncontroversial”

What about an individuals property rights? Is someone not allowed scope to choose who stays on their property – especially given that it will cost the owner. I’m not saying whose rights I think are more important, I’m just saying that the choice involves a value judgment.

I’m not sure that making the firm take on the burden of the persons disability is fair, even if it is imperfect I think a lump sum payment would be a fairer way of achieving these equity goals – after all it is a natural endowment issue

Ha, I think that is semantics, really: the hotel had a policy of refusing dogs so charging extra for the dogs effectively discriminates on the basis of disability. I’m fairly confident that indirect discrimination is recognised under NZ law, but perhaps someone who knows about it could clarify the situation?

Matt:

1) I agree, that’s why I said enforcement would be difficult: there’s always a way to continue to discriminate when policing is imperfect.

2) The business doesn’t lose out relative to its competition if they’re all required to do the same thing. However, the value judgment that disabled peoples’ right to be free of discrimination trumps businesses’ right to price discriminate is, hopefully, fairly uncontroversial.

Anyway continuing

2) If the scheme is enforceable, the business loses out from having to charge a higher price if it wouldn’t have earlier (when it could price discriminate in a sense). In a sense we are stating that we value the choice of the disabled person above the choice of the property owner – is this not just a value judgment.

Interesting points as always, I just have a few questions:

“Prices would rise very slightly and everyone who used the service would subsidise the disabled people who also used it”

1)Unless we have reasonably strict enforcement, Isn’t it also possible that prices would not change, and disabled people would miss out on rooms – after all a hotel could just say that it is full.

Also