An amount of money that just compensates a person, group, or whole economy, for the welfare effects of a change in the economy, thus providing a monetary measure of that change in welfare. Same aswillingness to pay. Contrasts with equivalent variation.
Related information about compensating variation:
- Compensating variation - Wikipedia, the free encyclopedia
In economics, compensating variation (CV) is a measure of utility change introduced by John Hicks (1939). 'Compensating variation' refers to the amount of ...
- Compensating Variation
Compensating variation can be used to calculate the effect of a price change on an individual's overall welfare. The best way to understand it is to work through it ...
- 16. Compensating Variation and Equivalent Variation - YouTube
Nov 8, 2009 ... In this video, I introduce two measures of consumer welfare: compensating variation and equivalent variation. In the process of introducing ...
- Compensating and Equivalent Variation and Consumer Surplus
Compensating variation and equivalent variation are two different answers to the question: How much of a change in income is necessary to offset a change in ...
- Compensating variation: Information from Answers.com
Compensating Variation The amount of additional income needed to restore an individual's original level of utility following a change in the economic ...
- Chapter 19: Compensating and Equivalent ... - User Web Areas
In this case the compensating variation is negative – the individual needs .... things from different perspectives: the compensating variation from the perspective ...
- Compensating Variation - Economics - About.com
Compensating Variation Defined - A Dictionary Definition of Compensating Variation.
- Compensating and Equivalent Variation - Ucsc
and has an income of %$$. The price of good 1 increases to 2. What are the compensating variation and the equivalent variation? Answer. The optimal bundle is ...