Radner’s cost–benefit analysis in the small: An equivalence result
I show that local changes in five welfare measures are equal: a measure proposed by Radner (1993); consumers’ surplus; the Slutsky change in real wealth; the Divisia quantity index, and Debreu’s (1951) coefficient of resource utilization (the last two rescaled in units of a numeraire good).
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132, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Edward E. Schlee, 2013. "Surplus Maximization and Optimality," American Economic Review, American Economic Association, vol. 103(6), pages 2585-2611, October.
- Arrow, Kenneth J & Lind, Robert C, 1970. "Uncertainty and the Evaluation of Public Investment Decisions," American Economic Review, American Economic Association, vol. 60(3), pages 364-378, June.
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- Bruce, Neil, 1977. "A Note on Consumer's Surplus, the Divisia Index, and the Measurement of Welfare Changes," Econometrica, Econometric Society, vol. 45(4), pages 1033-1038, May.
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