Measurement of Welfare Change: A Review

Zuhair A. Hassan
November 1995  [95-WP 141]

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Hassan, Z.A. 1995. "Measurement of Welfare Change: A Review." Working paper 95-WP 141. Center for Agricultural and Rural Development, Iowa State University.


Three measure commonly used to evaluate the consumer welfare implications of a policy change are reviewed. The notion of consumer surplus is dealt with first, followed by an assessment of the concepts of compensating variation and equivalent variation. The relationships among the three concepts are also considered.