Value and income
This paper argues that income is a flow of value to society; therefore, an economic modeler's choice of a concept of value imposes a concept of income. The argument is used to distinguish three concepts of national income. (1) In a discounted-utilitarian model, which is usually the basis for theoretic discussions of net national income, the formulation of value imposes a concept of income that is not observable and hence does not provide income statistics. (2) In a perfectly competitive economy, national income is, in principle, observable. Study of the competitive model provides a theoretic foundation for national accounting, with extensions to distorted economies. However, two unobservable components of ideal income, consumers' surplus and capital gains, are perforce neglected. (3) A maximin program is the mathematical representation of another value, sustaining an economy. It employs a method of intertemporal valuation that does not involve discounting. Income is sustained value. Since a maximin program is not expressed for a distorted economy, there is no observable indicator of whether an economy is being sustained.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
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.:
- Martinet, Vincent & Rotillon, Gilles, 2007.
"Invariance in growth theory and sustainable development,"
Journal of Economic Dynamics and Control,
Elsevier, vol. 31(8), pages 2827-2846, August.
- Vincent Martinet & Gilles Rotillon, 2007. "Invariance in growth theory and sustainable development," Post-Print hal-01186926, HAL.
- Dasgupta, Partha & M Ler, Karl-G Ran, 2000. "Net national product, wealth, and social well-being," Environment and Development Economics, Cambridge University Press, vol. 5(01), pages 69-93, February.
- Cairns, Robert D., 2002. "Green accounting using imperfect, current prices," Environment and Development Economics, Cambridge University Press, vol. 7(02), pages 207-214, May.
- R. M. Solow, 1974.
"Intergenerational Equity and Exhaustible Resources,"
Review of Economic Studies,
Oxford University Press, vol. 41(5), pages 29-45.
- R. M. Solow, 1973. "Intergenerational Equity and Exhaustable Resources," Working papers 103, Massachusetts Institute of Technology (MIT), Department of Economics.
- John C. V. Pezzey, 2002.
"Sustainability Policy and Environmental Policy,"
Economics and Environment Network Working Papers
0211, Australian National University, Economics and Environment Network.
- J Sefton & M Weale, 2005. "The Concept of Income in a General Equilibrium," NajEcon Working Paper Reviews 122247000000000844, www.najecon.org.
- Cairns, Robert D., 2000. "Sustainability accounting and green accounting," Environment and Development Economics, Cambridge University Press, vol. 5(01), pages 49-54, February.
- Asheim, Geir & Buchholz, Wolfgang, 2003.
"A General Approach to Welfare Measurement through National Income Accounting,"
32/2002, Oslo University, Department of Economics.
- Geir B. Asheim & Wolfgang Buchholz, 2004. "A General Approach to Welfare Measurement through National Income Accounting," Scandinavian Journal of Economics, Wiley Blackwell, vol. 106(2), pages 361-384, 06.
- Geir B. Asheim & Wolfgang Buchholz, 2002. "A General Approach to Welfare Measurement through National Income Accounting," CESifo Working Paper Series 831, CESifo Group Munich.
- Y. Hossein Farzin, 2006. "Conditions for Sustainable Optimal Economic Development," Review of Development Economics, Wiley Blackwell, vol. 10(3), pages 518-534, 08.
- J. A. Sefton & M. R. Weale, 2006. "The Concept of Income in a General Equilibrium," Review of Economic Studies, Oxford University Press, vol. 73(1), pages 219-249.
- John Hartwick, 1976.
"Intergenerational Equity and the Investing of Rents from Exhaustible Resources,"
220, Queen's University, Department of Economics.
- Hartwick, John M, 1977. "Intergenerational Equity and the Investing of Rents from Exhaustible Resources," American Economic Review, American Economic Association, vol. 67(5), pages 972-74, December.
- Robert D. Cairns, 2002. "Green national income and expenditure," Canadian Journal of Economics, Canadian Economics Association, vol. 35(1), pages 1-15, February.
- Avinash Dixit & Peter Hammond & Michael Hoel, 1980. "On Hartwick's Rule for Regular Maximin Paths of Capital Accumulation and Resource Depletion," Review of Economic Studies, Oxford University Press, vol. 47(3), pages 551-556.
- K. E. Boulding, 1949. "Income or Welfare," Review of Economic Studies, Oxford University Press, vol. 17(2), pages 77-86.
- M. L. Weitzman, 1974.
"On the Welfare Significance of National Product in Dynamic Economy,"
125, Massachusetts Institute of Technology (MIT), Department of Economics.
- Martin L. Weitzman, 1976. "On the Welfare Significance of National Product in a Dynamic Economy," The Quarterly Journal of Economics, Oxford University Press, vol. 90(1), pages 156-162.
- Solow, Robert, 1993. "An almost practical step toward sustainability," Resources Policy, Elsevier, vol. 19(3), pages 162-172, September.
- Robert Cairns, 2003. "Reconciling the Green Accounts," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 25(1), pages 51-63, May.
- Cairns, Robert D. & Long, Ngo Van, 2006. "Maximin: a direct approach to sustainability," Environment and Development Economics, Cambridge University Press, vol. 11(03), pages 275-300, June.
When requesting a correction, please mention this item's handle: RePEc:eee:ecolec:v:66:y:2008:i:2-3:p:417-424. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.