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

A STATISTICAL METHOD FOR MEASURING “MARGINAL UTILITY” 181 reach adjustment or equilibrium) will also have the same want- for-one-more unit of housing. This intercomparability is more truly applicable as between large groups of workingmen’s families, as revealed in the average family budgets, than as between two particular families. In fact, while it helped at the outset to picture three identical families, just as it helped to think of our measurements as in “pounds” or “square feet,” in practice—at least in the present state of our knowledge and statistics—we can scarcely expect to measure the wants of any individual family. Variability and chance enter in too much. To make any progress toward prac- tical measurements we must combine hundreds of families, and use only averages—albeit the “average family” is as mythical and non-existent, except as an average, as is the “economic man.” In this way we may hope to reach at least an approximate measure of man’s economic psychology in the mass. There is one field in which, without any guidance but common sense, we have expressed in figures the appraisal of mankind of the comparative value of money to people of different incomes. That field is taxation. Not only would it seem to all reasonable people unfair to assess the same number of dollars of taxes against the workingman as against the millionaire but to most people it would seem unfair to assess even the same rate per dollar of income. Even the philosophic doubter, if himself taxed unfairly, would be apt to know it! He would scarcely be satisfied if told that any comparison between his tax burden and others is mean- ingless because his mental phenomena and others’ are incom- mensurable. At any rate, whether justified or not, the method here set, forth does proceed on the assumption of commensurability, and my object in setting this forth is not so much to prove it correct as frankly to face it and point it out, as an assumption. Summary of Assumptions The following is a complete summary of the assumptions under- lying the second pair of equations, those on wantability. (a) Adjustment. The ‘budget groups used, like food, are assumed to be sufficiently subject to graduation in quantity and quality; and to be, in other ways, sufficiently adjustable, and adjusted, that the marginal dollar of an average or typical famaly

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