Compensating and Equivalent Variations associated with Quantitative Constraints

• Autores: Salvador López
• Localización: XII Encuentro de Economía Pública. Evaluación de las Políticas Públicas: Palma de Mallorca. Los días 3 y 4 de febrero de 2005, 2005, pág. 88
• Idioma: inglés
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• Resumen

  • The concepts of compensating and equivalent variation are widely used in Public Economics.They derive from the expenditure function and are applied to price changes. In this paper we enlarge the field of application of these concepts to situations involving quantity changes. Using the constrained expenditure function, we study the compensating and equivalent variations associated with changes in quantitative constraints on labour supply and credit demand.