Voluntary Export Restraints and Rationing: UK Leather Footwear Imports from Eastern Europe

Following the imposition of a quantitative import restriction someone somewhere must be quantity rationed. Concentrating on demand we develop methods to test and allow for the presence of rationing in the estimation of demand equations and in the calculation of the welfare effects of quantitative restrictions. Using a CES model we analyse the voluntary export restraints on U.K. imports of two types of leather footwear from Comecon countries. The results suggest that, even if prices did not rise to clear the market, U.K. consumers could have lost up to £60 million in 1986 from these restrictions.