Journal of Productivity Analysis

, Volume 24, Issue 2, pp 133–155 | Cite as

Productivity and Welfare

  • Lilyan E. Fulginiti
  • Richard K. Perrin


Technical change is generally characterized by a rate and biases, both evaluated for given 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.

Key words

productivity Allias surplus general equilibrium 

JEL Classification

D2 D5 D6 O3 


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Copyright information

© Springer Science+Business Media, Inc. 2005

Authors and Affiliations

  1. 1.University of Nebraska Agricultural Experiment StationLincolnUSA
  2. 2.University of NebraskaUSA

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