A Utilitarian Measure Of Economic Growth

Dan Usher

No 1356, Working Paper from Economics Department, Queen's University

Abstract: A utilitarian measure of economic growth combines changes in the distribution ofincome with changes in real income per person to show how much better off people are becoming over time. It is the rate of growth of the dollar value of average utility of income. As such , it is seen differently by people with different utility of income functions. A growth rate in U.S. household income of 0.63% per year as ordinarily measured disappears altogether - is transformed into a decline of 0.086% per year - when the utility of income function is sufficiently concave. Strengths, weaknesses and implicit assumptions of the utilitarian measure are discussed.

Keywords: National Income; Utilitarian; Certainty-equivalence (search for similar items in EconPapers)
JEL-codes: E31 E32 O40 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2016-02
New Economics Papers: this item is included in nep-mac and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:qed:wpaper:1356

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