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A simple and efficient method for estimating the magnitude and precision of welfare changes: comment
Author(s) -
Irvine Ian J.,
Sims William A.
Publication year - 2002
Publication title -
journal of applied econometrics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.878
H-Index - 99
eISSN - 1099-1255
pISSN - 0883-7252
DOI - 10.1002/jae.654
Subject(s) - simple (philosophy) , welfare , econometrics , economics , magnitude (astronomy) , computer science , mathematical economics , philosophy , physics , epistemology , astronomy , market economy
A recent article (Breslaw and Smith, 1995) published in this journal provided an iterative numerical technique for computing the welfare effects of price changes. In this note we take issue with the application used to demonstrate this technique. In particular, we show that the demands used are inappropriate and that the authors incorrectly interpret the precision of the estimates of welfare change. Copyright © 2002 John Wiley & Sons, Ltd.