MONEY METRICS IN APPLIED WELFARE ANALYSIS: A SADDLEPOINT REHABILITATION

• 成果类型: Article
• 署名作者: Schlee, Edward E.; Khan, M. Ali
• 署名单位: Arizona State University; Arizona State University-Tempe; Johns Hopkins University
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.12535
• 发表日期: 2022
• 页码: 189-210
• 关键词: Comparative statics; revealed preference; consumers-surplus; Tax reforms; utility; ECONOMICS; FOUNDATIONS

摘要

Once a popular tool to estimate welfare changes, the money metric of McKenzie-Samuelson gradually faded from use after welfare theorists and practitioners argued that it led to inegalitarian recommendations. We prove that, at a competitive equilibrium price, any associated competitive allocation maximizes the money-metric sum; and, as is well understood, competitive allocations can be egalitarian or inegalitarian. The result applies to economies in which individual demand is not rationalizable by any binary relation, let alone a binary relation representable by a utility function, a behavioral setting considered, for example, in Bernheim-Rangel.