The Meaning, Nature, and Source of Value in Economics
Author(s)
Scitovsky, Tibor
Abstract
Economists are interested in the subjective values associated with the sources of individual satisfaction because of their concern with the economy’s ability to allocate resources and coordinate production and distribution so as to create the greatest benefit to society. For many needs and desires, competitive markets are a relatively good means for determining and responding to individual preferences. There are, however, limits to this solution, because not all sources of satisfaction go through markets, and markets may fail in other ways as well. National product and income estimates as measured by market transactions are therefore incomplete and inadequate measures of overall welfare. Correcting for this by estimating values uncounted by the market can help, although this is often difficult, and at times virtually impossible.
