ABSTRACT
The per capita net national income used as a measure of the level of welfare is a typical index number. The computation of an index number involves application of some well-defined but essentially arbitrary conventional procedures to direct or indirect measurements of observed, or at least in principle observable, phenomena. The conventional interpretation of net national income valued in some constant prices can be conveniently rationalized in terms of the ad hoc assumption that preferences of a representative average consumer can be described by a social utility function or a fixed set of well-behaving social indifference curves. While the input coefficients of ordinary goods can usually be derived from the observed flows, information on the magnitude of the structural coefficient describing the generation and elimination of pollutants has in most instances to be obtained directly from technological sources. Combined with appropriate figures of the outputs of all pollution-generating activities, these coefficients provide a basis for estimation of the pollution flows.
