The consistency of welfare judgments with a representative consumer

Abstract

It is common practice to use the representative consumer hypothesis without specifically assuming any of the sufficient conditions under which one will exist. We show, first, that it is possible for the utility of the representative consumer to increase when every actual consumer is made worse off. Second, in economies where this does not occur, there exists a social welfare function, which we construct, which is consistent with welfare judgments based on the utility of the representative consumer. Finally, we provide a converse to Samuelson's 1956 representative consumer result. © 1988.