The Intuition Behind Income Effects of Price Changes in Discrete Choice Models, and a Simple Method for Measuring the Compensating Variation
揭示了Small和Rosen测量消费者剩余方法的五个理论假设，指出其仅适用于无非线性收入效应的单一离散选择，并提出一种近似期望补偿变分的简单方法，用实证数据比较了其表现。
Small and Rosen’s (Econometrica 49(1):105–130, 1981 ) method for measuring consumer surplus using discrete choice models has been widely adopted in public policy analysis. For the case of a price change, the present paper elucidates five theoretical assumptions inherent within Small and Rosen’s measure, and employs indifference maps to demonstrate that this measure is only applicable to the context of a single discrete choice free of non-linear income effects. The paper argues that, where non-linear income effects are present, the aforementioned theoretical assumptions should be relaxed, and the consumption context revised from discrete choice to discrete–continuous demand. Furthermore, the paper proposes a simple analytical method for approximating the expected Hicksian compensating variation in the presence of non-linear income effects, and compares the empirical performance of this method against existing methods using data from Morey et al. (Am J Agric Econ 75(3):578–592, 1993 ). As well as offering a simple approximation, the proposed method yields insights on the potential range of the compensating variation depending on the extent of switching between choice alternatives, and on the attribution of the compensating variation to the relevant choice alternatives.