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- Title
Evaluation of Welfare Change in Quantity-Constrained Regimes.
- Authors
Cornes, Richard; Albon, Robert
- Abstract
There are many circumstances where individuals are subject to constraints other than income and prices, Evaluation of welfare change from a price-taking position to a quantity-constrained position presents special problems. While remaining firmly in the partial-equilibrium tradition, indifference curves in the price-quantity space are applied to the identification of an equivalent variation, a modified Marshallian measure and a compensating variation in quantity-constrained situations. These measures satisfy the condition of CV < MS < EV for a normal good. A Marshallian measure that has been used--the 'simple Marshallian measure'--is shown to have a considerable drawback.
- Subjects
WELFARE economics; PRICING
- Publication
Economic Record, 1981, Vol 57, Issue 157, p186
- ISSN
0013-0249
- Publication type
Article
- DOI
10.1111/j.1475-4932.1981.tb01050.x