Measurability of Utility (or Welfare)
After the Pivogian era the tendency of the majority of economists was to adhere to Pareto's view that utility is not measurable. (In this note the words utility and welfare will be considered as synonymous). Recently in the Netherlands measurability has been defended again, by Bernard M.S. van Praag and his school (including A. Kapteyn, A. Kouwenhoven, Th. Goedhart, T.J. Wansbeek, F,G. van Herwaarden, J. Buyze, H v.d. Stadt, and others) and by this author. Van Praag and his pupils made considerable contributions to both theory and measurement; the present author concentrated on the application only. The essence of their empirical work consists of direct interviewing of very large numbers of European consumers. The question consists of indicating the income intervals in which the interviewee would feel resp. 'excellent,' 'good,' 'amply sufficient,' etc . . . . down to 'very bad' (9 intervals).
|Keywords||Pareto, Pareto's optimality, utility functions, welfare economics|
Tinbergen, J.. (1985). Measurability of Utility (or Welfare). De Economist. Retrieved from http://hdl.handle.net/1765/10058