Price Index Dispersion And Utilitarian Social Evaluation
AbstractThe living standard indicator in utilitarian social evaluation functions (USEF) is the ratio of a nominal living standard and a price index. We show that under weak association of price indices and nominal living standards and usual concavity conditions on utility functions, utilitarian social welfare increases with price index dispersion when the aggregate price level is superior to the arithmetic mean of price indices, and diminishes when it is inferior to the harmonic mean.
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Bibliographic InfoPaper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie AD with number 2005-09.
Length: 10 pages
Date of creation: Mar 2005
Date of revision:
Publication status: Published by Ivie
Personal income distribution; economic welfare; price dispersion;
Other versions of this item:
- Muller, Christophe, 2005. "Price index dispersion and utilitarian social evaluation," Economics Letters, Elsevier, vol. 89(2), pages 141-146, November.
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- D6 - Microeconomics - - Welfare Economics
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