Hicks, Marshall, and Points Off the Demand Curve
It is well known that Marshall's measure of consumer's surplus is an underestimator of Hicks' equivalent variation of consumer's surplus when the points under consideration are on the consumer's demand curve. In this note it is shown that when the points are not both on the demand curve, a common situation for many policy questions, Marshall's measure may become an overestimator of Hick's measure.
Volume (Year): 4 (1976)
Issue (Month): 4 (October)
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