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Hicks, Marshall, and Points Off the Demand Curve

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  • Michael P. Murray

    (University of Virginia)

Abstract

It is well known that Marshall's measure of consumer's surplus is an underestimator of Hicks' equivalent variation of consumer's surplus when the points under consideration are on the consumer's demand curve. In this note it is shown that when the points are not both on the demand curve, a common situation for many policy questions, Marshall's measure may become an overestimator of Hick's measure.

Suggested Citation

  • Michael P. Murray, 1976. "Hicks, Marshall, and Points Off the Demand Curve," Public Finance Review, , vol. 4(4), pages 493-500, October.
    • Handle: RePEc:sae:pubfin:v:4:y:1976:i:4:p:493-500
    DOI: 10.1177/109114217600400408
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    References listed on IDEAS

    as
    1. DeSalvo, Joseph S, 1975. "Benefits and Costs of New York City's Middle-Income Housing Program," Journal of Political Economy, University of Chicago Press, vol. 83(4), pages 791-805, August.
    2. Foster, Christopher D & Neuburger, H L I, 1974. "The Ambiguity of the Consumer's Surplus Measure of Welfare Change," Oxford Economic Papers, Oxford University Press, vol. 26(1), pages 66-77, March.
    3. Olsen, Edgar O, 1972. "An Econometric Analysis of Rent Control," Journal of Political Economy, University of Chicago Press, vol. 80(6), pages 1081-1100, Nov.-Dec..
    4. Silberberg, Eugene, 1972. "Duality and the Many Consumer's Surpluses," American Economic Review, American Economic Association, vol. 62(5), pages 942-952, December.
    5. Murray, Michael P, 1975. "The Distribution of Tenant Benefits in Public Housing," Econometrica, Econometric Society, vol. 43(4), pages 771-788, July.
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    Cited by:

    1. Coffey, Cathal & Hogan, Paul J. & McQuinn, Kieran & O'Toole, Conor & Slaymaker, Rachel, 2022. "Rental inflation and stabilisation policies: international evidence and the Irish experience," Research Series, Economic and Social Research Institute (ESRI), number RS136.
    2. Michael P. Murray, 1978. "Methodologies for Estimating Housing Subsidy Benefits," Public Finance Review, , vol. 6(2), pages 161-192, April.
    3. Richard Cornes & Robert Albon, 1981. "Evaluation of Welfare Change in Quantity‐Constrained Regimes," The Economic Record, The Economic Society of Australia, vol. 57(2), pages 186-190, June.

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