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A Utilitarian Measure Of Economic Growth

Author

Listed:
  • Dan Usher

    (Department of Economics, Queen's University)

Abstract

A utilitarian measure of economic growth combines changes in the distribution ofincome with changes in real income per person to show how much better off people are becoming over time. It is the rate of growth of the dollar value of average utility of income. As such , it is seen differently by people with different utility of income functions. A growth rate in U.S. household income of 0.63% per year as ordinarily measured disappears altogether - is transformed into a decline of 0.086% per year - when the utility of income function is sufficiently concave. Strengths, weaknesses and implicit assumptions of the utilitarian measure are discussed.

Suggested Citation

  • Dan Usher, 2016. "A Utilitarian Measure Of Economic Growth," Working Paper 1356, Economics Department, Queen's University.
    • Handle: RePEc:qed:wpaper:1356
    as

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    File URL: https://www.econ.queensu.ca/sites/econ.queensu.ca/files/qed_wp_1356.pdf
    File Function: First version 2016
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    References listed on IDEAS

    as
    1. Blackorby,Charles & Bossert,Walter & Donaldson,David J., 2005. "Population Issues in Social Choice Theory, Welfare Economics, and Ethics," Cambridge Books, Cambridge University Press, number 9780521532587, September.
    2. Ng, Yew-Kwang, 1986. "Social criteria for evaluating population change: An alternative to the Blackorby-Donaldson criterion," Journal of Public Economics, Elsevier, vol. 29(3), pages 375-381, April.
    3. John C. Harsanyi, 1955. "Cardinal Welfare, Individualistic Ethics, and Interpersonal Comparisons of Utility," Journal of Political Economy, University of Chicago Press, vol. 63(4), pages 309-309.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Stavros A. Drakopoulos, 2024. "Value Judgements, Positivism and Utility Comparisons in Economics," Journal of Business Ethics, Springer, vol. 189(3), pages 423-437, January.
    2. John Komlos, 2016. "Growth of Income and Welfare in the U.S. 1979-2011," CESifo Working Paper Series 5880, CESifo.

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    More about this item

    Keywords

    National Income; Utilitarian; Certainty-equivalence;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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