A General Approach to Welfare Measurement Through National Income Accounting

36 Pages Posted: 16 Jan 2003

See all articles by Geir B. Asheim

Geir B. Asheim

University of Oslo - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Wolfgang Buchholz

Universitaet Regensburg; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: December 2002

Abstract

We develop a framework for analyzing national income accounting using a revealed welfare approach that is sufficiently general to cover, e.g., both the standard discounted utilitarian and maximin criteria as special cases. We show that the basic welfare properties of comprehensive national income accounting, which were previously ascribed only to the discounted utilitarian case, in fact extend to this more general framework. In particular, it holds under a wide range of circumstances that real NNP growth (or equivalently, a positive value of net investments) indicates welfare improvement. We illustrate the applicability of our approach by considering resource allocation mechanisms in the Dasgupta-Heal-Solow model of capital accumulation and resource depletion.

Keywords: National Income Accounting, Dynamic Welfare

JEL Classification: C43, D6, O47, Q01

Suggested Citation

Asheim, Geir B. and Buchholz, Wolfgang, A General Approach to Welfare Measurement Through National Income Accounting (December 2002). Available at SSRN: https://ssrn.com/abstract=369802 or http://dx.doi.org/10.2139/ssrn.369802

Geir B. Asheim (Contact Author)

University of Oslo - Department of Economics ( email )

P.O. Box 1095 Blindern
N-0317 Oslo
Norway
+47-2285 5498 (Phone)
+47-2285 5035 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

Wolfgang Buchholz

Universitaet Regensburg ( email )

D-93040 Regensburg, 93053
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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