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| '''Demonstrated preference''' is a concept, stated by Murray Rothbard, which asserts that people's choices reveal their preferences. | '''Demonstrated preference''' is a concept, stated by Murray Rothbard, which asserts that people's choices reveal their preferences. | ||
| ==Rothbard's Statement== | ==Rothbard's Statement== | ||
| :The concept of demonstrated preference is simply this: that actual choice reveals, or demonstrates, a man’s preferences; that is, that his preferences are deducible from what he has chosen in action. Thus, if a man chooses to spend an hour at a concert rather than a movie, we deduce that the former was preferred, or ranked higher on his value scale. Similarly, if a man spends five dollars on a shirt we deduce that he preferred purchasing the shirt to any other uses he could have found for the money. This concept of preference, rooted in real choices, forms the keystone of the logical structure of economic analysis, and particularly of utility and welfare analysis.<ref></ref> |
:"The concept of demonstrated preference is simply this: that actual choice reveals, or demonstrates, a man’s preferences; that is, that his preferences are deducible from what he has chosen in action. Thus, if a man chooses to spend an hour at a concert rather than a movie, we deduce that the former was preferred, or ranked higher on his value scale. Similarly, if a man spends five dollars on a shirt we deduce that he preferred purchasing the shirt to any other uses he could have found for the money. This concept of preference, rooted in real choices, forms the keystone of the logical structure of economic analysis, and particularly of utility and welfare analysis."<ref></ref> | ||
| ==References== | ==References== | ||
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Demonstrated preference is a concept, stated by Murray Rothbard, which asserts that people's choices reveal their preferences.
Rothbard's Statement
- "The concept of demonstrated preference is simply this: that actual choice reveals, or demonstrates, a man’s preferences; that is, that his preferences are deducible from what he has chosen in action. Thus, if a man chooses to spend an hour at a concert rather than a movie, we deduce that the former was preferred, or ranked higher on his value scale. Similarly, if a man spends five dollars on a shirt we deduce that he preferred purchasing the shirt to any other uses he could have found for the money. This concept of preference, rooted in real choices, forms the keystone of the logical structure of economic analysis, and particularly of utility and welfare analysis."
References
See also
- Actions speak louder than words
- Choice modelling
- Contingent valuation or stated preference methods
- Dollar voting
- Have one's cake and eat it too
- Opportunity cost
- Other people's money
- Partial knowledge
- Parable of the broken window
- Put your money where your mouth is
- Scarcity
- Tax choice
- There Ain't No Such Thing As A Free Lunch
- Time management
- Trade-off