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On the Measurement of Welfare for Market and Nonmarket Goods: A Numerical Approach
Author(s) -
Ebert Udo
Publication year - 2010
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1093/ajae/aap020
Subject(s) - nonmarket forces , welfare , economics , economic surplus , microeconomics , simple (philosophy) , factor market , market economy , philosophy , epistemology
Extending Vartia's (1983) framework, the paper presents a simple numerical approach to the measurement of welfare for market and nonmarket goods on the basis of an incomplete (mixed) demand system. The method allows the determination of exact welfare measures. It provides a flexible and well‐founded alternative to ad hoc methods based on consumer surplus.