Buchanan has made a significant contribution to joint supply theory by emphasizing the relevance of technological variability to welfare optimality conditions. This paper shows that it is the joint supply relationship in his analysis—not the externality relationship—that should be labeled multidimensional. Buchanan's graphical model is replaced with a modified version of Lancaster's consumption model so that Buchanan's “externality mix” can be readily identified as a misnomer for “joint-product mix.” This demonstrates what Buchanan himself asserts: an externality implies, but is not implied by. the presence of joint supply.
Get full access to this article
View all access options for this article.
References
1.
BatorF. M. (1957) “The simple analytics of welfare maximization.”Amer. Econ. Rev.47 (March): 22–59.
2.
BuchananJ. M. (1966) “Joint supply, externality and optimality.”Economica24 (November): 404–415.
3.
CoaseR. (1960) “The problem of social cost.”J. of Law & Economics3 (October): 1–49.
4.
KahnA. (1970) The Economics of Regulation: Principles and Institutions, Vol. 1. New York: John Wiley.
5.
LancasterK. (1966) “Change and innovation in the technology of consumption.”Amer. Econ. Rev.56 (May): 14–23.
6.
SamuelsonP. A. (1969) “Contrast between welfare conditions for joint supply and for public goods.”Rev. of Economics & Statistics51 (February): 26–30.
7.
TurveyR. (1963) “On divergences between social cost and private cost.”Economica21 (August): 309–313.
