Compensating Variation, Consumer's Surplus, and Welfare.

This article analyzes the conditions under which the compensating variation can be validly used in this generalized sense. These turn out to be precisely the same as conditions previously derived for the valid use of consumer's surplus as a welfare measure. In the final section of this article, the...

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Detalles Bibliográficos
Publicado en:	American Economic Review Vol. 70; no. 5; pp. 933 - 950
Autores principales:	Chipman, John S., Moore, James C.
Formato:	Artículo
Publicado:	American Economic Association Dec80
Materias:	Consumers' surplus Consumers Income Cost effectiveness Cost analysis Theory of distributions (Functional analysis) Consumer preferences
Acceso en línea:	Ver este registro en EBSCOhost

Descripción
Sumario:	This article analyzes the conditions under which the compensating variation can be validly used in this generalized sense. These turn out to be precisely the same as conditions previously derived for the valid use of consumer's surplus as a welfare measure. In the final section of this article, the authors analyze the problem of deriving the generalized equivalent and compensating variations, either exactly or approximately, from observable demand functions, by means of generalizations of, or alternatives to, consumer's surplus.