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The Aggregation Problem: Implications for Ecological and Biophysical Economics

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  • Fix, Blair

    (York University)

Abstract

This paper discusses the dimension problem in economic aggregation, as it relates to ecological and biophysical economics. The dimension problem consists of a simple dilemma: when we aggregate, the observer must choose the dimension of analysis. The dilemma is that this choice affects the resulting measurement. This means that aggregate measurements are dependent on one's goals, and on underlying theory. I explore the consequences of this predicament for ecological and biophysical economics. I discuss the many problems of using 'real' monetary value as the dimension of analysis. And I highlight how the dimension problem undermines the practice of seeking 'optimal' policy. Although there are no solutions, I discuss ways that ecological and biophysical economists can deal with the dimension problem.

Suggested Citation

  • Fix, Blair, 2019. "The Aggregation Problem: Implications for Ecological and Biophysical Economics," SocArXiv tfwju, Center for Open Science.
    • Handle: RePEc:osf:socarx:tfwju
    DOI: 10.31219/osf.io/tfwju
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    References listed on IDEAS

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    Cited by:

    1. Fix, Blair, 2020. "Economic Development and the Death of the Free Market," Working Papers on Capital as Power 2020/01, Capital As Power - Toward a New Cosmology of Capitalism.
    2. Fix, Blair, 2020. "Economic Development and the Death of the Free Market," SocArXiv g86am, Center for Open Science.
    3. Fix, Blair & Nitzan, Jonathan & Bichler, Shimshon, 2019. "Real GDP: The Flawed Metric at the Heart of Macroeconomics," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, issue 88, pages 51-59.
    4. Bichler, Shimshon & Nitzan, Jonathan, 2023. "Inflation as Redistribution. Creditors, Workers, Policymakers," Working Papers on Capital as Power 2023/01, Capital As Power - Toward a New Cosmology of Capitalism.
    5. Elen Presotto & Gabrielli Martinelli & Gabriela Allegretti & Edson Talamini, 2021. "Energy Efficiency, Monetary Costs, and Sustainability of Brazilian Rainfed and Irrigated Rice Cropping Systems," Biophysical Economics and Resource Quality, Springer, vol. 6(3), pages 1-14, September.
    6. Blair Fix, 2019. "Dematerialization Through Services: Evaluating the Evidence," Biophysical Economics and Resource Quality, Springer, vol. 4(2), pages 1-17, June.
    7. Dirk Schoenmaker & Hans Stegeman, 2023. "Can the Market Economy Deal with Sustainability?," De Economist, Springer, vol. 171(1), pages 25-49, March.
    8. Reiner Kümmel & Dietmar Lindenberger, 2020. "Energy in Growth Accounting and the Aggregation of Capital and Output," Biophysical Economics and Resource Quality, Springer, vol. 5(1), pages 1-10, March.

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