Publication:
Potential welfare and the sum of individual compensating or equivalent variations

Thumbnail Image
Identifiers
URI: http://hdl.handle.net/10016/4771
ISSN: 0022-0531
DOI: 10.1016/0022-0531(87)90004-4
Files
potential_ruizcastillo_JET_1987_ps.pdf (1.71 MB)
Publication date
1987-02
Defense date
Authors
Advisors
Tutors
Journal Title
Journal ISSN
Volume Title
Publisher
Elsevier
Impact
Google Scholar
Export
Research Projects
Organizational Units
Journal Issue
Abstract
We investigate under which conditions the sign of the sum of both the individual compensating and equivalent variations correctly indicates changes in potential welfare. Our results reproduce exactly those of Chipman and Moore for the National Income Test, which did not rely on individual measures of welfare directly related to consumers' preferences: (i) a necessary and sufficient condition for the new test to be valid is that individual preferences are identical and homothetic; and (ii) if the distribution of income is constant and preferences are homothetic, then the new test is valid only if preferences are also identical.
Description
Keywords
Política fiscal, Política monetaria, Distribución de la renta, Estado del bienestar
Bibliographic citation
Journal of Economic Theory, 1987, v. 41, n. 1, pp. 34-53
Collections
DE - Artículos de Revistas
Economists Online