Shaking up Measures of Consumer Economic Well-being

Thijs ten Raa

in World Scientific Books from World Scientific Publishing Co. Pte. Ltd.

Abstract: In this book the author analyzes measures of consumer well-being. The three main, neoclassical measures of well-being are the compensating variation, the equivalent variation, and consumer's surplus. The question is which of the measures of consumer well-being is the best. This book tackles the question, with a surprising outcome that is contrary to the main opinion in the literature. Prof ten Raa presents a test that measures must pass to track utility. The test will be used to sort measures in the remainder of the book. It will culminate in a variant of consumer's surplus, which he calls the consumer's index, and a generalization that applies to nonhomothetic demands. Variants of the consumer's index are presented, including ones that are applicable to demand functions with income effects, even nonlinear ones. So-called broad measures of consumer well-being, such as the Human Development Index, will be encompassed.

Keywords: Consumer's Surplus; Measures of Well-Being; Price Indices; Aggregation; Engel Curves; CES Functions; HDI (search for similar items in EconPapers)
JEL-codes: C01 D01 D9 (search for similar items in EconPapers)
Date: 2022
ISBN: 9789811249785
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