Open AccessOn Measuring the Social Opportunity Cost of Labour in the Presence of Tariffs and an Informal Sector (The Distinguishedl Lecture)
Author(s) -
M. Ali Khan
Publication year - 1992
Publication title -
pakistan development review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.154
H-Index - 26
ISSN - 0030-9729
DOI - 10.30541/v31i4ipp.535-564
Subject(s) - unit (ring theory) , economics , value (mathematics) , welfare , microeconomics , action (physics) , public economics , opportunity cost , labour economics , market economy , physics , mathematics education , mathematics , quantum mechanics , machine learning , computer science
Harberger introduced his influential 1971 essay with thefollowing words. This paper is intended not as a scientific study, noras a review of the literature, but rather as a tract - an open letter tothe profession, as it were - pleading that three basic postulates beaccepted as providing a conventional framework for applied welfareeconomics. The postulates are: (a) The competitive demand price for agiven unit measures the value of that unit to the demander; (b) Thecompetitive supply price for a given unit measures the value of thatunit to the supplier; and (c) When evaluating the net benefits or costsof a given action (project, programme, or policy), the costs andbenefits accruing to each member of the relevant group (e.g., a nation)should normally be added without regard to the individual(s) to whomthey accrue.