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http://ssrn.com/abstract=1676261
 
 

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Economic Value and Cost are Subjective


Edward Peter Stringham


Fayetteville State University - School of Business and Economics; Texas Tech University - Rawls College of Business

September 13, 2010

HANDBOOK ON CONTEMPORARY AUSTRIAN ECONOMICS, Peter J. Boettke, ed., Edward Elgar Publishing, 2010

Abstract:     
Question 1 begins by discussing an area of subjectivism where most economists agree: Is economic value subjective? This area differentiates most modern economists from classical economists and many non-economists. Question 2 probes an area where many but not all economists agree: Are costs subjective? This area differentiates many Austrian and certain neoclassical economists from orthodox neoclassical economists following Alfred Marshall’s tradition. Questions 3, 4, 5, and 6 discuss areas where even fewer still economists agree: Can we survey people’s subjective preferences? Can we measure an individual’s utility? Can we compare utility between individuals? Can we aggregate the utility of many people? For these questions one can find Austrian and neoclassical economists on both sides of the debate. Questions 7, 8, 9, and 10 look at alternative approaches to making welfare comparisons between nations that do not purport to depend on measuring subjective utility, such as looking at per capita income, migration patterns, society-wide cost-benefit analysis with dollars as the unit of measurement, and a demonstrated preference Pareto rule. Where one stands on these issues depends on how far one is willing to extend the logic of economic subjectivism. And where one stands on questions of economic subjectivism has an important influence on how one analyzes the world and what policies one recommends.

Number of Pages in PDF File: 30

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Date posted: September 16, 2010  

Suggested Citation

Stringham, Edward Peter, Economic Value and Cost are Subjective (September 13, 2010). HANDBOOK ON CONTEMPORARY AUSTRIAN ECONOMICS, Peter J. Boettke, ed., Edward Elgar Publishing, 2010. Available at SSRN: http://ssrn.com/abstract=1676261

Contact Information

Edward Peter Stringham (Contact Author)
Fayetteville State University - School of Business and Economics ( email )
Fayetteville, NC 28301
United States
HOME PAGE: http://www.uncfsu.edu/sbe/HackleyChair/Stringham_Bio.htm
Texas Tech University - Rawls College of Business ( email )
Lubbock, TX 79409
United States
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