X-inefficiency in the use of income to attain economic satisfaction

Mariano Rojas

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), 2008, vol. 37, issue 6, 2278-2290

Abstract: This investigation uses a subjective well-being approach to provide a novel empirical answer to an old normative debate in economic literature: whether consumers use efficiently their income. Based on a large database from Mexico, the paper shows that there exists substantial X-inefficiency in the use of income; even when a relaxed criterion to define the thick frontier is followed. X-inefficiency in the use of income can emerge from personal errors and from social-organization deficiencies. Sustainable development concerns make it critical to focus on reducing X-inefficiency as an alternative way to increase economic well-being.

Keywords: Subjective; well-being; Economic; satisfaction; X-inefficiency; Consumption; Income; Mexico (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:soceco:v:37:y:2008:i:6:p:2278-2290

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