equivalent variation

USAGE SUMMARY

The phrase "equivalent variation" is correct and usable in written English.
It is typically used in economics to refer to the amount of money a consumer would be willing to pay to avoid a price increase or the amount they would need to receive to be as well off after a price increase. Example: "The equivalent variation for the price increase of the product was calculated to determine the consumer's welfare change."

✓ Grammatically correct

Science

News & Media

Formal & Business

Human-verified examples from authoritative sources

Exact Expressions

16 human-written examples

Economists commonly use two measures to assign monetary value to some good or service: the "compensating variation" and the "equivalent variation".

The Economist

The compensating variation asks how much money we would have to give a person to make up for taking the good away from them while the equivalent variation asks how much money someone would give up to acquire the good in question.

The Economist

EV1 is the welfare change (reformed vs. BASE economy) measured by an Equivalent Variation.

IZA Journal of Labor Policy

Net pension savings and welfare changes (Equivalent Variation for workers starting their unemployment scheme, EV1) from the pension reform.

IZA Journal of Labor Policy

In absolute terms, the largest Equivalent Variation occurs among the unemployed with high previous wages and pension rights, peaking at above 3,000 euros.

IZA Journal of Labor Policy

Table 3 also shows the impact on welfare measured in terms of the equivalent variation (EV) as a result of carbon tax and BAMs.

Journal of Economic Structures

Human-verified similar examples from authoritative sources

Similar Expressions

44 human-written examples

In this work, the magnitudes of dose and dose equivalent variations from site to site are investigated.

Advances in Space Research

Alice creates α semantically equivalent variations n 1,…,n α of a digital artifact.

EURASIP Journal on Information Security

On the other hand, we know that these species are not precisely equivalent; variations in substrate utilization and metabolic capabilities that are known to occur between strains and species of Roseburia, for example, may indeed have consequences for the community and the host.

Gut Microbes

Variation in average heterozygosity is equivalent to variation in inbreeding in a classical model and thus, we accounted for the effect of this on the phenotype.

Genetics, Selection, Evolution

The equivalent conductivity variations are connected with the partial covalent of silver bromide and the cation size.

Electrochimica Acta

Expert writing Tips

Best practice

When discussing economic policies or price changes, use "equivalent variation" to precisely quantify the impact on consumer welfare in monetary terms. This provides a clear and understandable measure of the change in well-being.

Common error

Don't use "equivalent variation" interchangeably with "compensating variation". While both measure welfare changes, "equivalent variation" assesses how much a consumer would pay to avoid a change, while compensating variation measures how much they need to be compensated after a change.

Linguistic Context

The phrase "equivalent variation" primarily functions as a noun phrase, specifically a term of art within economics. It denotes a precise measure of welfare change, quantifying the amount of money a consumer would be willing to pay to avoid a particular change. Ludwig provides numerous examples of its use in economic research and analysis.

Expression frequency: Common

Frequent in

Science

60%

News & Media

25%

Formal & Business

15%

Less common in

Academia

0%

Encyclopedias

0%

Wiki

0%

Ludwig's WRAP-UP

In summary, "equivalent variation" is a specific economic term that measures the welfare impact of a change in monetary terms. As Ludwig AI indicates, it is grammatically correct and frequently appears in scientific, news, and business contexts. While similar to "compensating variation", it's crucial to distinguish the two: "equivalent variation" focuses on willingness to pay to avoid a change, whereas compensating variation deals with the compensation needed after a change. Use it to precisely quantify the effects of economic policies, but be mindful of its technical nature and avoid casual or informal settings. The insights of Ludwig, along with the provided examples, ensure accurate and effective use of this economic concept.

More alternative expressions

Phrases that express similar concepts, ordered by semantic similarity:

compensating variation

Focuses on the amount of compensation needed to maintain the same level of utility after a price change, contrasting with the willingness to pay to avoid the change.

consumer surplus adjustment

Focuses on adjusting the consumer surplus to reflect a change in price or policy, which is one way to calculate "equivalent variation".

welfare change

Broader term that encompasses any alteration in well-being, while "equivalent variation" specifically quantifies this change in monetary terms.

change in consumer welfare

Describes the overall alteration in well-being, with "equivalent variation" quantifying this change in monetary terms.

monetary valuation

Refers to the process of assigning a monetary value, whereas "equivalent variation" is a specific method for determining that value.

welfare measurement

A general term for assessing well-being, while "equivalent variation" provides a specific quantitative measure.

economic welfare indicator

A broad term for measures of economic well-being, while "equivalent variation" is a specific indicator used in economic analysis.

economic impact

Describes the broader effect of a change on the economy, while "equivalent variation" focuses on the impact on individual consumer welfare.

monetary equivalent

Emphasizes the monetary value representing something else, where "equivalent variation" is a more specific economic concept.

utility change

Refers to the change in satisfaction or happiness, while "equivalent variation" measures this change in monetary units.

FAQs

How does "equivalent variation" differ from compensating variation?

"Equivalent variation" measures how much money a consumer would be willing to pay to avoid a price change, while "compensating variation" measures how much money a consumer would need to be given to offset the effects of a price change.

In what contexts is it appropriate to use "equivalent variation"?

Use "equivalent variation" when you want to quantify the welfare impact of a price change or policy change on consumers in monetary terms. It's commonly used in cost-benefit analysis and policy evaluation.

What are some alternatives to using the term "equivalent variation"?

Depending on the context, you might use terms like "welfare change", "monetary valuation", or "economic impact". However, these terms are broader and may not capture the specific meaning of "equivalent variation".

How is "equivalent variation" calculated in practice?

The calculation of "equivalent variation" typically involves comparing a consumer's utility before and after a change, and then determining the amount of money that would need to be given or taken away to make the consumer indifferent between the two situations. This often requires the use of sophisticated economic models.