It is remarkable how many of the things which common sense tells us are part of economic welfare form almost no part of the literature of the subject. None of the major works on welfare economics, for example, contains more than passing references to advertising, new products or ‘inefficient’ consumer choices.1 The failure to deal adequately with such major facts of economic life must be counted as a serious weakness of the subject. The aim of this book is an attempt to redress the imbalance by integrating these issues more closely into the discussion of welfare economics.
KeywordsAmerican Economic Review Welfare Economic Welfare Effect Consumer Choice Major Work
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Notes and References
- 1.See, for example, I. M. D. Little, A Critique of Welfare Economics (Oxford University Press, 1957 )Google Scholar
- J. de V. Graaf Theoretical Welfare Economics (Cambridge University Press, 1967).Google Scholar
- 2.See E. A. Pessemier, ‘Stochastic Properties of Changing Preferences’, American Economic Review, vol. 68 (May 1978) p. 380.Google Scholar
- 3.Tibor Scitovsky, ‘Allocation and Distribution Theory: Technological Innovation and Progress —Discussion’, American Economic Review, Papers and Proceedings, vol. 56 (May 1966) p. 47.Google Scholar
- 4.With respect to most goods, for example, it has been said that ‘the characteristics that they yield are either nebulous to begin with or else present major problems of definition and measurement…. As a consequence, applied demand analysts frequently have little choice but to work directly with goods’ — see Lester D. Taylor, ‘Commentaries on Ratchford, “The New Economic Theory of Consumer Behavior: an Interpretive Essay”’, Journal of Consumer Research, vol. 2 (Sept. 1975) p. 77.CrossRefGoogle Scholar
- 5.Scitovsky’s experience is interesting in this regard. In The Joyless Economy he sought to analyse the motivational basis of people’s tastes — a radical departure in demand theory — which brought forth as he put it, a ‘unanimous hostility’ from economists. See T. Scitovsky, The Joyless Economy: An Inquiry into Human Satisfaction and Consumer Dissatisfaction (Oxford University Press, 1976) p. xv.Google Scholar