In this book the author analyzes measures of consumer well-being. The
three main, neoclassical measures of well-being are the compensating
variation, the equivalent variation, and consumer's surplus. The
question is which of the measures of consumer well-being is the best.
This book tackles the question, with a surprising outcome that is
contrary to the main opinion in the literature. Prof ten Raa presents a
test that measures must pass to track utility. The test will be used to
sort measures in the remainder of the book. It will culminate in a
variant of consumer's surplus, which he calls the consumer's index, and
a generalization that applies to nonhomothetic demands. Variants of the
consumer's index are presented, including ones that are applicable to
demand functions with income effects, even nonlinear ones. So-called
broad measures of consumer well-being, such as the Human Development
Index, will be encompassed.