interpersonal comparisons Quick reference
A Dictionary of Economics (5 ed.)
...interpersonal comparisons Comparing the welfare of one individual with that of another. The welfare level of an individual is measured by a utility function . Utility can be ordinal so that it is no more than a numbering of indifference curves. An ordinal utility function can be subjected to any monotonic increasing transformation, f , without changing its meaning: the initial utility function U and the transformed utility U * = f ( U ) are equivalent. Utility is cardinal when the initial utility function U is equivalent to the transformed function...
interpersonal comparisons
cardinal utility
equal sacrifice
ordinal utility
collective choice
cardinal utility Quick reference
A Dictionary of Economics (5 ed.)
... U generates the transformed utility function U* = a + bU , where b > 0. The utility function U is cardinal if the functions U and U* represent the same set of underlying preferences. An example of cardinal utility is an expected utility function. See also interpersonal comparisons ; ordinal utility...
equal sacrifice Quick reference
A Dictionary of Economics (5 ed.)
...and measurement of sacrifice. One possibility is that there should be an equal sacrifice of consumption but this could be in absolute or proportional terms. An alternative is that the sacrifice is measured in utility terms, but this raises difficult questions about interpersonal comparisons of utility. See also ability to pay...
Arrow’s impossibility theorem Quick reference
A Dictionary of Economics (5 ed.)
...: if option A is preferred to option B and B to C in the social ranking then C cannot be preferred to A . The impossibility theorem proves that there is no aggregation process that simultaneously satisfies these five axioms. See also collective choice ; interpersonal comparisons ; voting...
ordinal utility Quick reference
A Dictionary of Economics (5 ed.)
...conveys no more information than that contained in the indifference curves. The observation that the utility from choice x is greater than the utility from choice y means only that x lies on a higher indifference curve than y . See also cardinal utility ; interpersonal comparisons...
collective choice Quick reference
A Dictionary of Economics (5 ed.)
...choice being made through a social welfare function that has individual utility levels as arguments. A collective choice is made by confronting the alternatives with the social welfare function and choosing the option yielding the highest level of welfare. If interpersonal comparisons of utility cannot be made then the construction of a social welfare function faces the same impossibility as any other collective choice process. See also paradox of voting ; voting...
Wicksteed, Philip Henry (1844–1927) Reference library
The Biographical Dictionary of British Economists
...of the Laws of Distribution ( 1894 ) and The Common Sense of Political Economy ( 1910 ). In the former work, Wicksteed sets out for the first time his theory of value, or worth. He makes the point that individual assessments of value will differ, and that interpersonal comparisons of utility are difficult, to say the least. However, he also argues that a more equal distribution of income offers a greater chance of providing more value, or worth, to more people. Co-ordination of the Laws of Distribution extends the marginal theory of rent into a...
Labor Mobility Reference library
Jason Long and Joseph P. Ferrie
The Oxford Encyclopedia of Economic History
...numbers of black farm workers migrated voluntarily to northern cities and took up urban employment. Few sources make possible long-run comparisons of labor mobility in different eras. In the 1850s migration across county boundaries was more common than in the 1970s. Upward occupational mobility was also somewhat more common in the 1850s than in the 1970s both in comparisons of fathers' and sons' occupations and in comparisons of individuals' first and last occupations. See also Labor Markets and Internal Migration . Bibliography Commons, John R. , et al. ...
Wootton, Barbara (1897–1988) Reference library
The Biographical Dictionary of British Economists
...mechanism. However, she denied that neoclassical economic theory could provide a secure basis for making statements about the levels of social welfare that were associated with different allocations of productive resources. Here Robbins was hoist with his own petard. If interpersonal comparisons of utility were illegitimate, then it was indeed impossible to use the law of diminishing marginal utility to justify redistributing income from rich to poor. But Robbins’s principle also destroyed the usefulness of orthodox welfare economics as a whole. Four years later...
Pigou, Arthur Cecil (1877–1959) Reference library
The Biographical Dictionary of British Economists
...transfers by the state. Another, little noticed, implication of Pigou’s double criterion was that no policies which increased the national dividend but made the poor worse off could be recommended, unless the poor were actually compensated. The utilitarian view that inter-personal comparisons of utility were possible was challenged during the 1930 s by the so-called New Welfare Economics (see Hicks 1939 ). Redistribution, on this view, could not be justified ‘scientifically’ but had to be settled by value judgements. This apparently left economists able to...
Kaldor, Nicholas (1908–86) Reference library
The Biographical Dictionary of British Economists
...of the Firm ’, Economic Journal (1934), March. ‘ Market Imperfections and Excess Capacity ’, Economica (1935), February. ‘ Professor Pigou on Money Wages in Relation to Unemployment ’, Economic Journal (1937), December. ‘ Welfare Propositions in Economics and Interpersonal Comparisons of Utility ’, Economic Journal (1939a), September. ‘ Speculation and Economic Stability ’, Review of Economic Studies (1939b), October. ‘ A Model of the Trade Cycle ’, Economic Journal (1940), March. An Expenditure Tax (1955). ‘ Alternative Theories of...
Meade, James Edward (1907–95) Reference library
The Biographical Dictionary of British Economists
...distortions. Instead of the negative tone of Lipsey and Lancaster, Meade focused on the positive, on policies that could be applied if there were distortions that policy makers could not eliminate. Rather than accept the consensus view that welfare economics should shun inter-personal comparisons of utility, Meade introduced distributional weights, enabling him to speak in terms of aggregate welfare. These weights would of course depend on the judgements of policy makers, but if policy was to be analysed, such judgements had to be made. He also anticipated much...
Fisher, Irving (1867–1947) Reference library
The Biographical Dictionary of American Economists
...the Transactions of the Connecticut Academy of Arts and Sciences in 1892 . An ordinalist presentation of general equilibrium analysis, Fisher's thesis was the first significant American work in general equilibrium theory. He drew indifference loci, and refrained from interpersonal comparisons of utility, objecting that the ‘foisting of Psychology on Economics seems to me in appropriate and vicious.’ Fisher reinvented most of the theory for himself, before discovering the writings of Walras and Edgeworth , to whom he gave full acknowledgement in the final...
Economic Incentives, Risk Behaviors, and HIV Reference library
Sandra G.Sosa-Rubí and Omar Galárraga
The Oxford Encyclopedia of Health Economics
...is presented in a targeted way, at a specific time, or through a particular agent. Terris (2016): A static model differentiates drivers of demand for male and female condoms: Advertising is highly effective in raising demand for male but not female condoms; otherwise, interpersonal communication is more potent for stimulating female condom demand. Furthermore, female condom demand is >3 times as sensitive as male condom demand to price changes. ( Terris-Prestholt & Windmeijer, 2016 ) Identity priming Increasing the saliency of an individual’s gender,...
Hicks, John Richard (1904–89) Reference library
The Biographical Dictionary of British Economists
...A Dictionary of Economics (1987, vol. 2, pp. 641–6). ——, ‘Hicks on General Equilibrium and Stability’, in H. Hagemann and O.F. Hamouda (eds), The Legacy of Hicks: His Contributions to Economic Analysis (1994). Kaldor N. , ‘ Welfare Propositions in Economics and Interpersonal Comparisons of Utility ’, Economic Journal (1939), vol. 49, pp. 549–52. Kennedy, C. , ‘Capital Theory’, in H. Hagemann and O.F. Hamouda (eds), The Legacy of Hicks: His Contributions to Economic Analysis (1994). Little, I.M.D. , A Critique of Welfare Economics (Oxford,...
