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’ 191 Similarly, multiplying (11) and (4) we obtain SspsW ee p2/p1 (13) SioiW1 ¢o/ Before we can plot the want curve for food we need to get ¢3 from the budget tables; and before we can do the same for rent we need similarly to find p;. Suppose we find ¢5=30% and p;=24% ; we now have all the data needed for calculating and plotting the two want curves (for food and shelter). All our data may be tabulated for refer- ence as follows: Si = $1000 per year ¢ 1 Fr *. 4 W J wan 1 ¢*] er per IS S; = $600 per year $2 = .50 n2 20 : it per “Ib.” 1 per “sq. {i 1 wantab Wa= S; = $1440 per year bs = .30 Ps = 2D Vy 81.33% per “lb.” KR: $3 per “sq. ft.” Ws: = .33% wantabs In this table the four given magnitudes are S,, Fs, Rs, Wo, all in the middle column and three of them being the units of measure- ment assumed. The remaining magnitudes are all calculated from these four, or obtained from budget tables or from our assumed conditions. We could now easily plot the quantity of food and its want- ability from Sign 1000 X .40 Ww. 75 Z $1.331 = 1.00 these two being the “latitude and longitude” of one point (that for Case 1) ; and, likewise plot the analagous quantity and want- ability for Case 3: n Sade _ 144030 _ 394.00 Wal «1.331 = 44. Such a curve would be none other than the “curve of diminishing utility of food” used in our text books but not hitherto reducible to statistics. The figures show that (according to our purely illustrative data) if the quantity (or, more strictly, index) of food consumed is increased from 300 to 324 the want-for-one-more unit of it decreases from 1.00 to .44 wantabs.

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