Economic essays

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Monograph

Identifikator:: 1753623200

URN:: urn:nbn:de:zbw-retromon-136107

Document type:: Monograph

Title:: Economic essays

Place of publication:: New York

Publisher:: Macmillan

Year of publication:: 1927

Scope:: viii, 368 S.; Ill., graph. Darst.

Digitisation:: 2021

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: A statistical method for measuring "marginal utility" and testing the justice of a progressive income tax / Irving Fisher

Collection:: Economics Books

178 ECONOMIC ESSAYS IN HONOR OF JOHN BATES CLARK 3 to 4. The equation implies simply that the subjective desire for a dollar, or a dollar’s worth of food, will also be as 3 to 4. Equilibrium of Dollars Variously Spent I have used alternatively “a dollar or a dollar’s worth of food.” But this implies another assumption which must be explicitly specified, namely, that the want-for-one-more dollar is the same as the want-for-one-more dollar’s worth of food, and likewise as to one more dollar’s worth of housing, or of anything else. This is a familiar theorem in theoretical economics, resting on the idea that if, temporarily, there is any inequality between dollars in different uses, the family will speedily rectify it by spending more money in the direction where a dollar will bring more satisfaction than in other directions, until perfect equi- librium is established, whereupon one more dollar spent in any direction will bring exactly the same satisfaction as if spent in any other direction. Without such assumption of equilibrium, we would have not merely one uniform W; in Case 1, but many diverse W’s which we should have to distinguish as, say Wy, for a dollar’s worth of bread, W,” for a dollar’s worth of sugar, W," for a dollar’s worth of potatoes, etc., all differing slightly from each other. Strictly speaking such differences always do exist in some degree. But while there is never absolute equilibrium in this world, yet, for all practical purposes, I think we are safe in pinning our faith to this assumption of an approximate equi- librium of the want-for-one-more dollar’s worth of all com- modities and services, at least for all which are easily sub- divisible. The only exception to substantial equilibrium which is at all likely to trouble us in this statistical quest, is in respect to housing accommodation. Here the adjustments are so slow, that, with a rapid change in incomes or unequal changes in prices of foods, rents, ete., several months at least may be required before the tenants have had time to get their best money’s worth. It takes time to find the best bargains which the new situation has created, time to move into new quarters, time to get free of lease See my Mathematical Investigations, also Auspitz und Lieben, Untersuchungen iiber die Theorie des Preises, Leipzig (Dunkler & Humblot). 1889.

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