This volume presents an approach to the evaluation of economic policies through the econometric modeling of aggregate consumer behavior. While the preferences of individual consumers are revealed by their market choices, these preferences can be recovered only by econometric methods, not through the index numbers used in the official statistics. The richer and more robust methodology presented in this volume provides a fruitful point of departure for future policy evaluations.
The econometric approach replaces ordinal measures of individual welfare that cannot be compared among individuals with cardinal measures that can. These are combined into an indicator of social welfare that reflects principles of horizontal and vertical equity. This approach unifies the measurement of poverty, inequality, and cost and standard of living. It extends the scope of normative economics to a broader range of issues in the evaluation of economic and social policies.
- ISBN10 0262100630
- ISBN13 9780262100632
- Publish Date 11 August 1997
- Publish Status Transferred
- Out of Print 17 October 2014
- Publish Country US
- Publisher MIT Press Ltd
- Imprint MIT Press
- Format Hardcover
- Pages 462
- Language English
- URL http://mitpress.mit.edu/9780262100632