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A simple and efficient method for estimating the magnitude and precision of welfare changes: comment

Author

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  • Ian J. Irvine

    (Department of Economics, Concordia University, 1455 de Maisonneuve Blvd W, Montreal, Quebec, Canada H3G IM8)

  • William A. Sims

    (Department of Economics, Concordia University, 1455 de Maisonneuve Blvd W, Montreal, Quebec, Canada H3G IM8)

Abstract

A recent article (Breslaw and Smith, 1995) published in this journal provided an iterative numerical technique for computing the welfare effects of price changes. In this note we take issue with the application used to demonstrate this technique. In particular, we show that the demands used are inappropriate and that the authors incorrectly interpret the precision of the estimates of welfare change. Copyright © 2002 John Wiley & Sons, Ltd.

Suggested Citation

  • Ian J. Irvine & William A. Sims, 2002. "A simple and efficient method for estimating the magnitude and precision of welfare changes: comment," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 17(1), pages 81-83.
    • Handle: RePEc:jae:japmet:v:17:y:2002:i:1:p:81-83
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    References listed on IDEAS

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    1. Breslaw, Jon A & Smith, J Barry, 1995. "A Simple and Efficient Method for Estimating the Magnitude and Precision of Welfare Changes," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 10(3), pages 313-327, July-Sept.
    2. Hunt-McCool, Janet & Kiker, B F & Ng, Ying Chu, 1994. "Estimates of the Demand for Medical Care under Different Functional Forms," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 9(2), pages 201-218, April-Jun.
    3. Willig, Robert D, 1976. "Consumer's Surplus without Apology," American Economic Review, American Economic Association, vol. 66(4), pages 589-597, September.
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    Cited by:

    1. Zhen Sun & Yang Xie, 2013. "Error Analysis and Comparison of Two Algorithms Measuring Compensated Income," Computational Economics, Springer;Society for Computational Economics, vol. 42(4), pages 433-452, December.

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