A General Approach to Welfare Measurement through National Income Accounting
Geir B. Asheim
University of Oslo - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)
Universitaet Regensburg; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)
Scandinavian Journal of Economics, Vol. 106, No. 2, pp. 361-384, June 2004
A framework is developed for analyzing national income accounting using a revealed welfare approach that is sufficiently general to cover, both the standard discounted utilitarian and maximin criteria as special cases. We show that the basic welfare properties of comprehensive national income accounting, previously ascribed only to the discounted utilitarian case, extend to this more general framework. In particular, under a wider range of circumstances, it holds that real NNP growth (or, equivalently, a positive value of net investments) indicates welfare improvement. We illustrate the applicability of our approach in the Dasgupta-Heal-Solow model of capital accumulation and resource depletion.
Number of Pages in PDF File: 24Accepted Paper Series
Date posted: September 27, 2004
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