Harberger versus Marshall. Approximating general equilibrium welfare changes

V. Kerry Smith

doi:10.1016/0165-1765(87)90047-4

Harberger versus Marshall. Approximating general equilibrium welfare changes

V. Kerry Smith

Economics

Research output: Contribution to journal › Article › peer-review

Abstract

This paper illustrates how computable general equilibrium models can be used to evaluate the limits of partial equilibrium analysis. The example used for the analysis involves welfare measurement for economy-wide exogenous shocks. Comparison of Harberger's general equilibrium approximation to consumer surplus and the Marshallian partial equilibrium measures indicates that there are cases where the latter offers a reasonably accurate measure of welfare change in a general equilibrium setting.

Original language	English (US)
Pages (from-to)	123-126
Number of pages	4
Journal	Economics Letters
Volume	25
Issue number	2
DOIs	https://doi.org/10.1016/0165-1765(87)90047-4
State	Published - 1987

ASJC Scopus subject areas

Finance
Economics and Econometrics

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10.1016/0165-1765(87)90047-4

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title = "Harberger versus Marshall. Approximating general equilibrium welfare changes",

abstract = "This paper illustrates how computable general equilibrium models can be used to evaluate the limits of partial equilibrium analysis. The example used for the analysis involves welfare measurement for economy-wide exogenous shocks. Comparison of Harberger's general equilibrium approximation to consumer surplus and the Marshallian partial equilibrium measures indicates that there are cases where the latter offers a reasonably accurate measure of welfare change in a general equilibrium setting.",

author = "Smith, {V. Kerry}",

note = "Funding Information: * Partial support for this research was provided by NSF grants ATM8217307 Oceanographic Institute. {\textquoteright} See ch. 2 of Krutilla and Eckstein (1958) for an overview of the conditions description of the theoretical rationale for benefit-cost analysis. {\textquoteright} This is not to suggest that the issue underlying general equilibrium welfare literature. See ch. 9 and Appendix D of Just, Hueth and Schmitz (1982) for a Copyright: Copyright 2014 Elsevier B.V., All rights reserved.",

year = "1987",

doi = "10.1016/0165-1765(87)90047-4",

language = "English (US)",

volume = "25",

pages = "123--126",

journal = "Economics Letters",

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N1 - Funding Information: * Partial support for this research was provided by NSF grants ATM8217307 Oceanographic Institute. ’ See ch. 2 of Krutilla and Eckstein (1958) for an overview of the conditions description of the theoretical rationale for benefit-cost analysis. ’ This is not to suggest that the issue underlying general equilibrium welfare literature. See ch. 9 and Appendix D of Just, Hueth and Schmitz (1982) for a Copyright: Copyright 2014 Elsevier B.V., All rights reserved.

PY - 1987

Y1 - 1987

N2 - This paper illustrates how computable general equilibrium models can be used to evaluate the limits of partial equilibrium analysis. The example used for the analysis involves welfare measurement for economy-wide exogenous shocks. Comparison of Harberger's general equilibrium approximation to consumer surplus and the Marshallian partial equilibrium measures indicates that there are cases where the latter offers a reasonably accurate measure of welfare change in a general equilibrium setting.

AB - This paper illustrates how computable general equilibrium models can be used to evaluate the limits of partial equilibrium analysis. The example used for the analysis involves welfare measurement for economy-wide exogenous shocks. Comparison of Harberger's general equilibrium approximation to consumer surplus and the Marshallian partial equilibrium measures indicates that there are cases where the latter offers a reasonably accurate measure of welfare change in a general equilibrium setting.

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DO - 10.1016/0165-1765(87)90047-4

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JO - Economics Letters

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ER -

Harberger versus Marshall. Approximating general equilibrium welfare changes

Abstract

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