Facchini, Giovanni; Hammond, Peter J.; Nakata, Hiroyuki - Department of Economics, Stanford University - 2000
July 2000 <p> Marshallian consumer surplus (MCS) is generally an inaccurate measure of welfare change because it neglects income effects. Suppose these effects overturn the usual demand response to a price change. Then, the deadweight loss from a distortionary tax or subsidy has the wrong sign,...</p>
