Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
The welfare of an individual depends not only on his own income but also on his income relative to that of others. A private good that he consumes yields him (intrinsic consumption and relative-income) utilities, but also imposes external costs on others through the relative-income effects. Expenditure on public goods not only produces intrinsic consumption utilities but also indirect relative-income utilities by reducing private expenditure. Since this indirect effect is unlikely to be adequately accounted for, the "optimal" level of public expenditure estimated by the conventional SMRS 3 MRT is really suboptimal. Copyright 1987 by Royal Economic Society.