Market demand curves and Dupuit-Marshall consumers' surpluses: a general equilibrium analysis

This paper investigates a claim of Hicks that the area to the left of a mar ket demand curve-calculated by assuming that other markets are in equilibri um-is equal to the aggregate overall Dupuit-Marshall consumers' surplus tog ether with producers' surplus in other markets, and extends it to general e quilibrium in an economy with a competitive private sector. The usefulness of the result is questioned by considering path independence and the possib ility of consistency with a Bergson-Samuelson social-welfare function. In t he only interesting possibility, there must be no income effects on non-num eraire goods for each person. (C) 1999 Elsevier Science B.V. All rights res erved.