Measures of welfare changes - either the equivalent or compensating variation of a price increase for a good - are often calculated using the expenditure function from an estimated demand. If the regression errors are due to unobserved preference heterogeneity, then then the estimated demand is...

In this essay, we read McKenzie's seventeen paragraphs of 1957 on “demand theory without a utility index” as an opening to the narrative of 20th-century demand theory, and as a lever for the understanding of what has now reached culmination as the neoclassical theory of demand. In tracking...