| Sumario: | This article evaluates the consumers' surplus and deadweight loss in welfare economics. Consumer's surplus is a widely used tool in applied welfare economics. The basic idea is to evaluate the value to a consumer for a change in price of a good. In empirical situations where a measure of either the compensating variation, equivalent variation, or deadweight loss is needed, economists often work with relatively simple demand specifications. The quasi-indirect utility function and expenditure function provide the appropriate compensated demand curve and thus the appropriate welfare measure.
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