Showing papers in "The Review of Economic Studies in 1937"

Mr Lerner’s “Note on Socialist Economics”

Abstract: In reply to Mr. Lerner’s note published in the last issue of the Review I have to make the following remarks. I take up the various points in the order in which they have been presented by Mr. Lerner.

A General Method for the Comparison of the Price of Living

Abstract: Two years ago this REVIEW published an article 1 in which I offered a method for the comparison of the price of living as between situations where tastes and milieu are identical, and which differ only in respect of prices. The present paper gives another more general method, which permits of comparing the price of living between any two or more situations that differ not only in respect of prices but where tastes and milieu may also be different. The problem of price-of-living comparisons consists in determining money incomes which yield equivalent satisfaction in the two or more situations under comparison. Its solution therefore requires the establishment of an objective criterion for the equivalence of money incomes. In the case of identical tastes and milieu the criterion used was the indifference of choice between them. Where tastes and milieu are not identical, this criterion can, however, no longer be applied: it obviously breaks down when more than one want system is involved. The present task therefore consists in finding another criterion which is independent of the assumption of identical tastes and milieu. Both from a theoretical and a practical point of view great importance attaches to the present problem on account of the fact that the question as to whether tastes and milieu are or are not identical as between different situations can of necessity only be answered by arbitrary decision.