Abstract
Consumer's surplus now plays an important role in public sector investment analysis (notably social cost‐benefit analysis) and is central to much of modern welfare economic theory. Despite this it is still a topic of considerable controversy and debate; indeed few concepts in the recent history of economic thought have aroused such a diversity of opinion. It must be almost unique, for example, for two Nobel laureates in the same discipline to take diametrically opposed positions over the importance of a basic method of measurement in their own subject. We find, however, Sir John Hicks arguing that ‘if economists are to play their part in shaping the canons of economic policy fit for a new age, they will have to build on the foundations of consumer's surplus’ whilst on the contrary Paul Samuelson dismisses the concept as being of ‘historical and doctrinal interest with a limited amount of appeal as a purely mathematical puzzle’.
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