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Retrospectives: Edgeworth's Hedonimeter and the Quest to Measure Utility

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  • David Colander

Abstract

In this article, I discuss some earlier debates about the foundations of utility and its measurement, focusing on the contributions of Francis Y. Edgeworth (1845-1926), a famous British economist who was a leader in the development of a more mathematically structured economics in the late 1800s, and Irving Fisher (1867-1947), one of the first quantitative U.S. economists, best-known today for his work on the quantity theory and interest rate theory. Edgeworth argued that utility was directly measurable and that new developments in "physio-psychology" would make it possible to develop a "hedonimeter" that would allow economists to develop a firm physiological underpinning of utility. Fisher, while agreeing with Edgeworth that it was important to have a workable measure of utility, disagreed with Edgeworth about the possibility of doing so with a hedonimeter and, hence, of having any physiological underpinnings of utility. He argued that instead of searching for physiological underpinnings of utility, economists should instead rely upon backward induction from observed behavior to measured utility. Neither of these views about the possibility of utility measurement carried through, and attempts to measure utility were abandoned in the 1930s, when utility measurement and happiness considerations were determined to be outside the purview of economics. Both Edgeworth and Fisher knew that their approaches to utility measurement opened up a Pandora's box of problems; they opened that box, nonetheless, because they felt that theoretical economics had to be relevant to policy, and, to be relevant, it had to face the problems.

Suggested Citation

  • David Colander, 2007. "Retrospectives: Edgeworth's Hedonimeter and the Quest to Measure Utility," Journal of Economic Perspectives, American Economic Association, vol. 21(2), pages 215-226, Spring.
  • Handle: RePEc:aea:jecper:v:21:y:2007:i:2:p:215-226
    Note: DOI: 10.1257/jep.21.2.215
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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.21.2.215
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    1. Daniel Kahneman & Alan B. Krueger, 2006. "Developments in the Measurement of Subjective Well-Being," Journal of Economic Perspectives, American Economic Association, vol. 20(1), pages 3-24, Winter.
    2. Daniel T. Slesnick, 1998. "Empirical Approaches to the Measurement of Welfare," Journal of Economic Literature, American Economic Association, vol. 36(4), pages 2108-2165, December.
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    Cited by:

    1. Giancarlo Romano G, 2013. "Acerca de la condición normativa de la teoría de la decisión racional," REVISTA CUADERNOS DE ECONOMÍA, UN - RCE - CID, December.
    2. repec:wsi:apjorx:v:34:y:2017:i:03:n:s021759591750004x is not listed on IDEAS
    3. Senderski, Marcin, 2014. "Ecumenical foundations? On the coexistence of Austrian and neoclassical views on utility," MPRA Paper 67024, University Library of Munich, Germany.

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