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Empirical Welfare Economics

Chambers, Christopher P. and Echenique, Federico (2021) Empirical Welfare Economics. . (Unpublished)

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Welfare economics relies on access to agents' utility functions: we revisit classical questions in welfare economics, assuming access to data on agents' past choices instead of their utilities. Our main result considers the existence of utilities that render a given allocation Pareto optimal. We show that a candidate allocation is efficient for some utilities consistent with the choice data if and only if it is efficient for an incomplete relation derived from the revealed preference relations and convexity. Similar ideas are used to make counterfactual choices for a single consumer, policy comparisons by the Kaldor criterion, and determining which allocations, and which prices, may be part of a Walrasian equilibrium.

Item Type:Report or Paper (Discussion Paper)
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URLURL TypeDescription Paper
Chambers, Christopher P.0000-0001-8253-0328
Echenique, Federico0000-0002-1567-6770
Additional Information:This paper is dedicated to the memory of Kim Border. We are grateful to audiences at the CUHK-HKU-HKUST Joint Theory Seminar, McGill University, Stanford University, the Workshop on Applications of Revealed Preferences, and Roy Allen for detailed comments.
Record Number:CaltechAUTHORS:20220707-170540821
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Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:115368
Deposited By: George Porter
Deposited On:07 Jul 2022 19:18
Last Modified:07 Jul 2022 19:18

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