The Concept of “The Impact of a Choice (or Natural Event) on Economic Efficiency”

Richard S. Markovits ()
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Richard S. Markovits: University of Texas School of Law

Chapter Chapter 1 in Welfare Economics and Antitrust Policy - Vol. I, 2021, pp 7-10 from Springer

Abstract: Abstract This chapter analyzes the “correct” definition of the concept of “the impact of a choice or natural event on economic efficiency.” Sect. 1.1 argues that definitions of this type of concept should be evaluated by their conformity to professional and popular understanding and their ability to contribute to the analyses in which they will be used. Section 1.2 articulates, elaborates on, and attempts to justify a monetized equivalent-variation-oriented definition of “the impact of a choice on economic efficiency” that it argues best satisfies these criteria. According to this definition, a choice’s impact on economic efficiency equals the difference between the number of dollars that would on appropriate assumptions I articulate and justify have to be transferred to its beneficiaries to leave them as well-off as the choice would leave them and the number of dollars whose withdrawal from the choice’s losers would on appropriate assumptions leave them as poorly-off as the choice would leave them.

Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-030-79812-3_1

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DOI: 10.1007/978-3-030-79812-3_1

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