ken hanly wrote:
But my understanding is that utility cannot be measured except in any but ordinal terms that is by ranking preferences. If marginal utility can be represented by dollars then doesn't that imply that there can be interpersonal comparisons of utility?
What can be compared, in the mainstream view, is the relative marginal utilities, but not the utility. We both may pay $3.00 per gallon for gasoline (the marginal value) and I might buy twice as much as you, but that doesn't tell us anything about how much utility you get nor how much utility I get from the purchase. BTW: Sen claims that "interpersonal comparisons of various types can be fully axiomatized and exactly incorporated in social choice procedures...." And, although we may not be able to "put everyone's utilities in an exact one-to-one correspondence with each other..., [i]t can be shown that there may be no general need for terribly refined interpersonal comparisons for arriving at definite social decisions.... Interpersonal comparisons need not be confined to 'all-or-none' dichotomies."
