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Compensating variation – Economic measure of utility change; Cost–benefit analysis – Systematic approach to estimating the strengths and weaknesses of alternatives; Kaldor–Hicks efficiency – State leading to a Pareto-efficient outcome, concerning the compensation principle; Pareto efficiency – Weakly optimal allocation of resources
A 'compensating differential', in contrast, refers exclusively to differences in pay due to differences in the jobs themselves, for a given worker (or for two identical workers). In the theory of price indices, economists also use the term compensating variation, which is yet another unrelated concept. A 'compensating variation' is the change ...
In economics, compensating variation (CV) is a measure of utility change introduced by John Hicks (1939). 'Compensating variation' refers to the amount of additional money an agent would need to reach their initial utility after a change in prices, a change in product quality, or the introduction of new products.
Compensating and equivalent variations. Equivalent variation (EV) is a measure of economic welfare changes associated with changes in prices. John Hicks (1939) is attributed with introducing the concept of compensating and equivalent variation.
Also called resource cost advantage. The ability of a party (whether an individual, firm, or country) to produce a greater quantity of a good, product, or service than competitors using the same amount of resources. absorption The total demand for all final marketed goods and services by all economic agents resident in an economy, regardless of the origin of the goods and services themselves ...
Hicksian demand functions are often convenient for mathematical manipulation because they do not require representing income or wealth. Additionally, the function to be minimized is linear in the , which gives a simpler optimization problem.
From January 2008 to December 2012, if you bought shares in companies when Vance D. Coffman joined the board, and sold them when he left, you would have a -8.1 percent return on your investment, compared to a -2.8 percent return from the S&P 500.
The economics behind programs such as the Kyoto Protocol was that the marginal cost of reducing emissions would differ among countries. [ 41 ] [ 42 ] Studies suggested that the flexibility mechanisms could reduce the overall cost of meeting the targets. [ 43 ]