The concept of cardinality is defined for a binary index of preference. The qualifications on the cardinality of the compensating and equivalent variations are examined in detail. It is argued that a characteristic index, such as the sign of the monotonic variation of consumer surplus, is adequate for most practical applications.
Get full access to this article
View all access options for this article.
References
1.
ChipmanJ. S. (1974) “Homothetic preferences and aggravation.”J. of Economic Theory8: 26–38.
2.
ChipmanJ. S.MooreJ. (1976) “The scope of consumer's surplus arguments,” in TangA. M. (eds.) Evolution, Welfare, and Time in Economics. Lexington, MA: D. C. Heath.
DavidH. A. (1963) “The method of paired comparisons.”Griffen's Statistical Monographs and Courses 12. New York: Hafner.
5.
HauseJ. C. (1975) “The theory of welfare cost measurement.”J. of Pol. Economy83: 1145–1182.
6.
HicksJ. R. (1942) “Consumers' surplus and index numbers.”Rev. of Economic Studies9: 126–137.
7.
HurwiczL.UzawaH. (1971) “On the integrability of demand functions,” in ChipmanJ. S. (eds.) Preferences, Utility, and Demand. New York: Harcourt Brace Jovanovich.
8.
KempM. C.Yew-KwangN.G. (1976) “On the existence of social welfare functions, social orderings and social decision functions.”Economica43: 59–66.
9.
KnuthD. E. (1973) The Art of Computer Programming, III: Sorting and Searching. New York: Addison-Wesley.
10.
RaderT. (1976) “Equivalence of consumer surplus, and Divisia Index of output, and Eisenberg's Addilog social utility.”J. of Economic Theory13: 58–66.
11.
SamuelsonP. A. (1965) “Using full duality to show that simultaneously additive direct and indirect utilities implies unitary price elasticity of demands.”Econometrica33: 781–796.
12.
SamuelsonP. A. (1948) “Consumption theory in terms of revealed preference.”Economica: 243–245.
13.
StahlD. O. (1984) “Monotonic variations of consumer surplus and comparative performance results.”Southern Econ. J. (October).
14.
StahlD. O. (1982a) “Quasi-homotheticity, the generalized Divisia Quantity Index, and aggregation.”Economica50 (February): 87–94.
15.
StahlD. O. (1982b) “A note on the consumer surplus path-of-integration problem.”Economica50 (February): 95–98.
16.
StahlD. O. (1980) “Indices of individual preference for applied welfare economics.” Working Paper SL-8002, Alfred P. Sloan Foundation Workshop in Transportation Economics, Department of Economics, University of California, Berkeley.
17.
VartiaY. O. (1983) “Efficient methods of measuring welfare change and compensated income in terms of ordinary demand functions.”Econometrica51 (January): 79–98.
18.
WilligR. D. (1976) “Consumer's surplus without apology.”Amer. Econ. Rev.66: 589–597.
19.
ZajacE. E. (1979) “Dupuit-Marshall consumer's surplus, utility, and revealed preference.”J. of Economic Theory20: 260–270.
