Measuring Consumer Surplus with Unknown Hicksian Demands
Abstract
The objective of this paper to introduce the Slutsky demand curve as a tool in welfare analysis. It is shown that the compensating or equivalent variation can in most cases be measured to within a fraction of a percent of their true value without any numerical integration techniques. Two well known examples in the literature are explored. A theoretical measure of the accuracy of the Slutsky based measure, relative to the Marshallian measure, is developed. The approach is locally path independent and can be used to measure the money value of a ration. Finally it application to models of labour supply is explored an an error in the literature is corrected.(This abstract was borrowed from another version of this item.)
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Bibliographic Info
Article provided by American Economic Association in its journal American Economic Review.
Volume (Year): 88 (1998)
Issue (Month): 1 (March)
Pages: 314-22
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Related research
Keywords:Other versions of this item:
- Irvine, I.J. & Sims, W.A., 1995. "Measuring Consumer Surplus with Unknown Hicksian Demands," Working Papers 219, University of Sydney, School of Economics.
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Steven Sheffrin & Tracy Turner, 2001. "Taxation and House-Price Uncertainty: Some Empirical Estimates," International Tax and Public Finance, Springer, vol. 8(4), pages 621-636, August.
- Bockstael, Nancy E. & Freeman III, A. Myrick, 2006. "Welfare Theory and Valuation," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 2, chapter 12, pages 517-570 Elsevier.
- C. Woo & J. Zarnikau & E. Kollman, 2012. "Exact welfare measurement for double-log demand with partial adjustment," Empirical Economics, Springer, vol. 42(1), pages 171-180, February.
- Miroslav Svoboda, 2008. "History and troubles of consumer surplus," Prague Economic Papers, University of Economics, Prague, vol. 2008(3), pages 230-242.
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