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THE ENRICHMENT OF A SECTOR (INDIVIDUAL, REGION OR COUNTRY) BENEFITS OTHERS: THE THIRD WELFARE THEOREM?
Author(s) -
Ng YewKwang
Publication year - 1996
Publication title -
pacific economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.34
H-Index - 33
eISSN - 1468-0106
pISSN - 1361-374X
DOI - 10.1111/j.1468-0106.1996.tb00177.x
Subject(s) - economics , monopolistic competition , welfare , sector model , population , supply and demand , microeconomics , labour economics , market economy , ecology , demography , sociology , biology , monopoly , agriculture
The economic enrichment of a sector may make other sectors as a whole better or worse off. However, for the benchmark case of proportionate enrichment, other sectors tend to gain. This result is shown using offer curves, supply and demand analysis, Cobb‐Douglas utility functions, and a more general case. Allowing the enriching sector to be monopolistic does not affect the result. Semi‐economic enrichment through migration and population growth also makes others better off. Most enrichments also tend to be equalizing in their effects on others.