Subj:	Correction
Date:	31/01/03
To:	king@harvard.edu

Average economic gain is also a function of (changes in assets, debts, public services, natural resources, inheritance, undeclared income, undeclared perks and so on) as well as changes in (declared income or consumption expenditure).    

We know this is true from our own experience as well as that of those around us.  The assumption that "changes in those variables are proportional to changes in declared income/consumption expenditure" is a very big assumption.   

Economists regularly make it in talking about a) "inequality" and b) "gains" from particular policies from studies of many countries using regression analysis.  

Matt