Homothetic utility, Roy’s Lemma and consumer’s surplus
Thijs ten Raa ()
Economics Letters, 2017, vol. 161, issue C, 133-134
I provide a short proof that consumer’s surplus normalized by income is the correct welfare measure when utility is homothetic.
Keywords: Consumer’s surplus; Compensating variation; Equivalent variation (search for similar items in EconPapers)
JEL-codes: D60 I31 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:161:y:2017:i:c:p:133-134
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