Measuring Welfare Changes in Quantity Constrained Regimes
The concepts of compensating and equivalent variation have been widely used both in empirical and in theoretical work. The strengths and weaknesses of these concepts have been carefully investigated, and methods have been proposed to calculate exact measures instead of approximating measures. For a recent survey of the issues involved, see e.g. McKenzie (1983), and Takayama (1984).
Unable to display preview. Download preview PDF.
- Blackorby, C.; Primont, D., and Russell, R. R. (1978): Duality, Separability, and Functional Structure: Theory and Economic Applications. Amsterdam etc.: North- Holland.Google Scholar
- Gorman, W. M. (1976): “Tricks with Utility Functions.” In Essays in Economic Analysis, edited by M. Artis and R. Nobay. Cambridge: Cambridge University Press, pp. 211–243.Google Scholar
- Hicks, J. R. (1956): A Revision of Demand Theory. London: Oxford University Press.Google Scholar
- Lankford, R. H. (1983): “Exact Consumer’s Surplus for Changes in Imposed Quantities.” Working Paper, State University of New York at Albany.Google Scholar
- Takayama, A. (1984): “Consumer’s Surplus, Path Independence, Compensating and Equivalent Variations.” Zeitschrift für die gesamte Staatswissenschaft 140: 594–625.Google Scholar