Measuring the Welfare Effects of Price Changes: A Convenient Parametric Approach

John Creedy

Australian Economic Papers, 1998, vol. 37, issue 2, 137-151

Abstract: This paper shows how compensating and equivalent variations, and the equivalent income, resulting from a set of price changes can be calculated. A linear expenditure system is estimated for each of a range of total expenditure groups using cross‐sectional budget data. The measures of welfare change can be used to determine the effect on the welfare of individuals in different income groups. Alternative social welfare functions can be used to evaluate the resulting distribution of equivalent income. The parametric approach is particularly useful where few data are available

Date: 1998
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Citations: View citations in EconPapers (21)

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https://doi.org/10.1111/1467-8454.00011

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Working Paper: Measuring the Welfare Effects of Price Changes: A Convenient Parametric Approach (1996)
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Persistent link: https://EconPapers.repec.org/RePEc:bla:ausecp:v:37:y:1998:i:2:p:137-151

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