© 2008 pearson addison wesley. all rights reserved chapter five consumer welfare and policy...

© 2008 Pearson Addison Wesley. All rights reserved

Chapter Five

Consumer Welfare and Policy Analysis

© 2008 Pearson Addison Wesley. All rights reserved. 5-2

前言

• 長久以來，折價券或優惠券一直是重要的促銷工具，不論對於製造業者或是零售商而言；但對消費者而言，使用折價券或優惠券會比正常價格來得低，它帶來一種物超所值的感受，因此也提高消費者的購買意願。

• 我們可以在哪裏看到它呢？– 實體商店

• Eg. 屈臣氏優惠券 ( 參見右圖 )

– 報章雜誌• Eg. 蘋果日報折價券

– 網絡 (E-coupon)

• Eg. 折價王 (MyCoupon ）是一個以折價為主題的網站，內容包羅萬象、應有盡有，包括折價券下載、促銷特賣訊息、藥妝試用、影視贈票等網路活動

網址﹕ http://www.mycoupon.com.tw/


「粉樂購」買 16 家省 3 萬 7

• 【 2009/10/14 聯合報╱記者顏甫珉／台北報導】• 對抗不景氣，一次網羅 16 家通路品牌優惠券的「粉樂購」，今起正式推出

，將在各通路店頭發出 106 萬本實體優惠券，還首度在網路上推出下載版優惠券，民眾若完全使用優惠券，約可省下 3 萬 7 千元。包括以下三大類﹕

• 速食餐飲類 – 摩斯有海洋珍珠堡搭配 ZERO 可樂買 1 送 1 ，– Mister Dount 消費滿 300 元送波堤獅公仔等等。

• 流行時尚類– 麗嬰房童鞋體驗價 5 折，– 阿瘦皮鞋繽紛派對女鞋特價 1,299 元。

• 休閒生活類 – 百視達租片 5 折， – 博客來商品折價券 3 張 20

資料來源：http://udn.com/NEWS/FASHION/FAS7/5194749.shtml


Consumer Welfare and Policy Analysis

• In this chapter, we examine five topics

1. Consumer Welfare

2. Expenditure Function and Consumer Welfare

3. Market Consumer Surplus

4. Effects of Government Policies on Consumer

Welfare

5. Deriving Labor Supply Curves


Consumer Welfare

• Measuring consumer welfare using a demand curve

– Consumer welfare from a good is the benefit a consumer gets from consuming that good minus what the consumer paid to buy the good.

• (Inverse) Demand Curve

– It contains the information we need to measure how much more you’d be willing to pay than you actually paid


Marginal Willingness to Pay

• The (inverse) demand curve reflects a

consumer’s marginal willingness to pay: the

maximum amount a consumer will spend for

an extra unit.

• The consumer’s marginal willingness to pay is

the marginal value the consumer places on

the last unit of output.


Consumer Surplus

• The monetary difference between what a

consumer is willing to pay for the quantity of the

good purchased and what the good actually

costs is called consumer surplus (CS).


Figure 5.1Consumer Surplus


Effect of a Price Change on Consumer Surplus

• Consumer surplus loss from a higher price.

– In Figure 5.2, as the price increases from 15 to 20, Jackie loses consumer surplus equal to areas A + B.


Figure 5.2Change in Consumer Surplus


Expenditure Function and Consumer Welfare

• The expenditure function is the minimal

expenditure necessary to achieve a specific

utility level, , for a given set of prices as

shown in equation (5.1)

• Equation 5.1

U



• We can evaluate the consumer surplus loss of a price increase from p1 to p1* as the

difference between the expenditures at these

two prices as shown in equation (5.2).

• Equation 5.2



• Compensating Variation (CV)

– CV is the amount of money one would have to give a consumer to offset completely the harm from a price increase — to keep the consumer on the original indifference curve.

– CV measure is the income involved in the income effect.



• Equivalent Variation (EV)

– EV is the amount of money one would have to take from a consumer to harm the consumer by as much as the price increase. It moves the consumer to the new indifference curve.


Figure 5.3Compensating Variation and Equivalent Variation


Comparing the Three Welfare Measures

• As shown in Figure 5.4 of a Price Increase:

ΔCS: areas A + B

CV : areas A + B + C

EV : area A

→If the good is normal, |CV| > |ΔCS| > |EV| ;

→If the good is inferior, |CV| < |ΔCS| < |EV| ;


Figure 5.4Compare CV, EV, and ΔCS


Little Difference Between the Three Measures

• According to the Slutsky equation, the

uncompensated elasticity of demand, ,

equals the compensated elasticity of demand,

*, minus the budget share of the good, ,

times the income elasticity, . (equation 4.9)

• The smaller the income elasticity or budget

share, the closer the three welfare measure

are to each other.


Table 5.1Welfare Measures


Market Consumer Surplus

• Market consumer surplus is the area under the market demand curve above the market price up to the quantity consumers buy.

Loss of Market Consumer Surplus from A Higher Price

• In general, as the price increases, consumer surplus falls more,

1)the greater the initial revenues spent on the good,

2)the less elastic the demand curve.



Figure 5.5Fall in Market Consumer Surplus as the Price of Roses Rises

Loss of a Market Consumer Surplus from A Higher Price

• Higher prices cause greater consumer

loss in some markets than in others.

• Consumers would benefit if policymakers,

before imposing a tax, considered in which

market the tax would be likely to harm

consumers the most.


Effects of Government Policies on Consumer Welfare

• The various consumer welfare measures are

used to answer questions about the effect on

consumers of government programs and

other events that shift consumers’ budget

constraints.


Quotas

• Consumers welfare is reduced if they cannot

buy as many units of a good as they want.

• Firms and government frequently limit how

much of a good one can buy by setting a

quota.



Figure 5.6Quota

Quota


• As shown in Fig. 5.6, the quota harms a

consumer because he/she has moved from

a higher indifference curve, I 1, to a lower

indifference curve, I 2.

• The difference between the expenditure on

the original budget line and the new

expenditure is this consumer’s equivalent

variation.

Food Stamps

• Why cash is preferred to food stamps

– Poor people who receive cash have more choices than those who receive a comparable amount of food stamps.

• As shown in Fig. 5.7, if we draw a budget line

with the same slope as the original that is tangent

to I 2, we can calculate the equivalent variation.



Figure 5.7Food Stamps Versus Cash

Child-Care Subsidies

• Would a price subsidy or a lump-sum

subsidy provide greater benefit to recipients

for a given government expenditure?

• Fig. 5.8 shows that the family is better off with

the lump sum than with the price subsidy of

child-care.



Figure 5.8Child-Care Subsidies

主要國家實際每週工時

• 我國自 2001 年起每週實際工時明顯下降，由 2000 年之 43.6 小時降至

2006 年之 41.6 小時，低於韓國之 44.2 小時、新加坡之 46.2 小時 (25 人

以上事業單位 ) 及香港之 47 小時，但仍高於日本之 35.4 小時及美國之 33.9

小時。

•洛桑管理學院 (IMD) 2007 年全球競爭力報告中指出， 2006 年各國實

際年工作時數最長的前四名依序為韓國 2,439 小時、墨西哥 2,385 小時、香

港 2,348 小時、印度 2,277 小時，皆高於我國之 2,256 小時（事實上根據行

政院主計處統計，我國年工時為月平均工時 180.8*12 個月=2,170 小時）。


資料來源：行政院勞工委員會統計處各國法定工時與實際工時比較

主要國家實際每週工時


年別台灣韓國新加坡香港日本美國加拿大法國德國2000 年 43.63 47.50 47.00 46.60 35.80 34.30 31.60 35.60 38.202001 年 41.49 47.00 46.20 46.50 35.50 34.00 31.60 35.80 38.002002 年 41.75 46.20 46.00 46.90 35.30 33.90 31.60 35.20 37.902003 年 41.70 45.90 46.00 46.70 35.50 33.70 31.90 34.20 37.902004 年 42.11 45.70 46.30 47.10 35.40 33.70 32.10 34.50 37.902005 年 41.88 45.10 46.50 47.00 35.20 33.80 31.90 34.70 37.902006 年 41.61 44.20 46.20 … 35.40 33.90 31.70 … 38.20

資料來源：我國行政院主計處「薪資與生產力統計月報」、韓國官方網站 (http://www.nso.gov.kr) 、新加坡 Yearbook of manpower Statistics 。附註： (1) 新加坡 2006 年以前僅包括 25 人以上之私部門， 2006 年以後則擴及 25 人以上之公、

私部門。 (2) 日本厚生勞動省以 30 人以上事業單位為調查對象。(3) 美國資料來源為 BLS 。(4) 加拿大資料來源為 ILO ，包含林業及加班工時。(5) 德國資料來源為德國統計局。

Deriving Labor Supply Curve

• Labor-Leisure Choice

– People choose between working to earn money to buy goods and services and consuming leisure: all their time spent not working for pay.

– Equation 5.6


Deriving Labor Supply Curve

• Demand of leisure time is linked to the

supply of labor time.

• Equation 5.7

• Equation 5.8


Deriving Labor Supply Curves

• We can derive the labor supply curve by

solving for the leisure demand with the

utility-maximizing problem as we derive the

demand curve for any good or service.

• Equation 5.9


Deriving Labor Supply Curves

• The optimal solution of this utility-maximization

is characterized by equating the marginal rate

of substitution of income for leisure, MRS,

to the marginal rate of transformation of

income for leisure, MRT, as indicated in

equation (5.11).

• Equation 5.11



Figure 5.9

Demand for Leisure


Figure 5.10Supply Curve of Labor

Income and Substitution Effects

• When leisure is a normal good, the substitution

and income effects work in opposite

directions, so whether leisure demand increases

or not depends on which effect is larger.

• If leisure is an inferior good, both the

substitution and income effect work in the

same direction, a wage increase unambiguously

causes the hours worked to rise.



Figure 5.11Income and Substitution Effects of a Wage Change

Shape of the Labor Supply Curve

• The labor supply curve can slope upward,

bend backward, or have sections with both

properties depending on the income

elasticity of leisure.

• At low wages, the substitution effect—work

more hours—dominates the income effect—

work fewer hours—while the opposite occurs

at higher wages.



Figure 5.12Labor Supply Curve That Slopes Upward and Then Bends Backward

Income Tax and Labor Supply

• Taxes on earnings are an unattractive way of

collecting money for the government if supply

curves are upward sloping, because the

taxes cause people to work fewer hours,

reducing the amount of goods that society

produces and raising less tax revenue than if

the supply curve were vertical or backward

bending.



• If the worker is in the backward-bending

section of the labor supply curve, the

relationship between the marginal tax rate

and tax revenue is bell-shaped, as in Fig.

5.13.



Figure 5.13Relationship of Tax Revenue to Tax Rates


• At first, if the tax rate rises a little more, tax

revenue must rise even higher, for two

reasons.

1)The government collects a larger

percentage of every dollar earned

because the tax rate is higher.

2)Employees work more hours as the tax

rate rises because workers are in

the backward-bending section.



• As the tax rate rises far enough, the workers

are in the upward-sloping section.

• In the upward-sloping section, an increase in

the tax rate reduces the number of hours

worked.

• When the reduction in hours worked more than

offsets the gain from the higher tax rate, so tax

revenue falls.


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