Welfare Equivalent NNP and Habit Formation
AbstractThis note concerns the importance of habit formation for social accounting. With internal habit formation, earlier procedures for welfare measurement in the first best apply with minor modifications. This result strengthens the idea behind using the comprehensive net national product as a welfare indicator. If, on the other hand, part of the habit formation is exogenous to each consumer, the exact welfare measure will also reflect the associated external effect.
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Bibliographic InfoPaper provided by Umeå University, Department of Economics in its series Umeå Economic Studies with number 680.
Length: 7 pages
Date of creation: 10 Apr 2006
Date of revision:
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Postal: Department of Economics, Umeå University, S-901 87 Umeå, Sweden
Phone: 090 - 786 61 42
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Web page: http://www.econ.umu.se/
More information through EDIRC
Social accounting; habit formation; welfare;
Find related papers by JEL classification:
- D10 - Microeconomics - - Household Behavior - - - General
- D60 - Microeconomics - - Welfare Economics - - - General
- D62 - Microeconomics - - Welfare Economics - - - Externalities
- I31 - Health, Education, and Welfare - - Welfare and Poverty - - - General Welfare
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-04-22 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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