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AN ECONOMIC ANALYSIS OF VALUE TO THE OWNER
Author(s) -
Ashton R.K.
Publication year - 1983
Publication title -
journal of business finance and accounting
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.282
H-Index - 77
eISSN - 1468-5957
pISSN - 0306-686X
DOI - 10.1111/j.1468-5957.1983.tb00427.x
Subject(s) - economics , value (mathematics) , economic surplus , microeconomics , surplus value , economic analysis , proposition , classical economics , mathematics , market economy , capitalism , philosophy , statistics , epistemology , politics , political science , welfare , law
This short paper applies the economists' concept of consumer surplus to the accountants' concept of value to the owner. It is shown that the two relevant concepts of consumer surplus ‐ the equivalent consumer surplus and the compensating consumer ‐ result in valuations that differ from the traditional Solomons, et al., analysis. This proposition is established by use of traditional neoclassical demand theory. It is also shown that whilst the analysis is essentially of a short run nature this is also true of the accountants' concept of value to the owner.