The Welfare Loss from Interdependent Preferences
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چکیده
Interdependent preferences generally imply Pareto inefficiency. For a general demand system, we characterize Pareto improvements, as well as the taxes and subsidies that reduce the welfare loss from such preferences. Using an estimated empirical model of this kind, we calculate the compensating variation corresponding to the welfare loss.
منابع مشابه
Characterizing Pareto Improvements in an Interdependent Demand System
Interdependent preferences generally imply Pareto inefficiency. For a general demand system, we provide a characterization of Pareto improvements. For a prominent parametric specification, the Linear Expenditure System, we characterize in detail the welfare loss associated with interdependent preferences. Using an estimated empirical model of this kind, we calculate the compensating variation c...
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تاریخ انتشار 2000