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From:
[log in to unmask] (J.I. Vorst)
Date:
Fri Mar 31 17:19:04 2006
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----------------- HES POSTING ----------------- 
I have found  Dutch economist Bernhard van Praag's work (a.k.a. the Leyden School)  in the
field of utility measurement rather convincing. In short (and incomplete):
 
His questionnaire approach is based on the assumption that  respondents are willing to
provide the best information possible. By setting the zero-one interval as permissible
range, the utility function assumes the characteristics of a statistical density function
with all its properties. The density function with the most embodied information (entropy)
is the normal distribution. Thus, respondents effectively provide information that can be
interpreted on the same statistical features as the normal distribution. Still, this does
not measure cardinal utility but a (series of)  level(s)  of   satisfaction "a la" ordinal
ranking. Results are not comparable among respondents, given the ordinality of responses.
 
BvP uses the results, i.a.,  to suggest equivalence scales and subjective poverty lines.
It is a promising approach -- original in its assumption and design and rather robust in
results. It beats the traditional "political" manipulation.
 
Jesse Vorst 
 
   
 
 
 
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