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Productivity and Welfare

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  • Fulginiti, Lilyan
  • Perrin, Richard

Abstract

Technical change is generally characterized by a rate and biases, both evaluated forgiven producer prices. This paper examines the potential discrepancy between this rate and the corresponding rate of consumer welfare change as measured by Allais distributable surplus. We postulate a general equilibrium context with various market failures (taxes, quotas, imperfect competition, and "poorly priced" commodities), and use comparative statics to express the rate of welfare change in terms of the rate and biases of the technical change. An elementary simulation model of a taxed economy suggests that the rate of welfare change may differ from the rate of technical change by as much as 50% under plausible circumstances.

Suggested Citation

  • Fulginiti, Lilyan & Perrin, Richard, 2002. "Productivity and Welfare," Efficiency Series Papers 2002/06, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).
    • Handle: RePEc:oeg:wpaper:2002/06
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    References listed on IDEAS

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    1. Binswanger, Hans P, 1974. "The Measurement of Technical Change Biases with Many Factors of Production," American Economic Review, American Economic Association, vol. 64(6), pages 964-976, December.
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    13. Trajtenberg, Manuel, 1989. "The Welfare Analysis of Product Innovations, with an Application to Computed Tomography Scanners," Journal of Political Economy, University of Chicago Press, vol. 97(2), pages 444-479, April.
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    Cited by:

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    2. Kibonge Naik, Aziza, 2014. "Agricultural Productivity In Sub-Saharan Africa: Carbon Dioxide Emissions From Land-Use Change," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 172350, Agricultural and Applied Economics Association.

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    More about this item

    Keywords

    productivity; Allais surplus; general equilibrium;
    All these keywords.

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • D5 - Microeconomics - - General Equilibrium and Disequilibrium
    • D6 - Microeconomics - - Welfare Economics
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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