The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Marginal Utility of Money

  • Eugene Silberberg
Reference work entry


Alfred Marshall identified the area to the left of a demand curve as consumer surplus, but he added that his discussion was valid only under the assumption of ‘constant marginal utility of money’. For much of the 20th century economists debated the meaning of that phrase and its relevance to consumer surplus. The analysis became clear only after the development of duality theory, particularly the properties of the expenditure function. Marshall’s caution becomes unnecessary with a proper definition of consumer surplus.


Consumer surplus Envelope theorem Hicksian and Marshallian demands Homothetic utility functions Indirect utility function Marginal utility of money Marshall, A. Money Roy’s equality 

JEL Classifications

This is a preview of subscription content, log in to check access.


  1. Marshall, A. 1920. Principles of economics. 8th ed. London: Macmillan.Google Scholar
  2. Samuelson, P.A. 1942. Constancy of the marginal utility of money. In Studies in mathematical economics and econometrics: In memory of Henry Schultz, ed. O. Lange, F. McIntyre, and T.O. Yntema. Chicago: University of Chicago Press.Google Scholar
  3. Silberberg, E., and W. Suen. 2000. The structure of economics. 3rd ed. New York: McGraw-Hill.Google Scholar

Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Eugene Silberberg
    • 1
  1. 1.