<p>No, you can not really say that. Here is the reason:</p>

<p>Utility is generally used to describe preferences. Let's say my happiness is described by this utility of chocolates: <span class="math-container">$Y(X) = X$</span>. So, two chocolates will give me two units of happiness. However, by definition of preferences, I am allowed to apply monotone transformations to them. Hence, you can just transform that function to <span class="math-container">$Y(X) = X^2$</span>. Now two chocolates will give me 4 units of happiness. </p>

<p>Again, by definition, this is a completely valid transformation. However, now I am getting 4 dollars instead of $2 because I simply transformed the function. For obvious reasons, you can not do that.</p>

<p>Hence, utility is unitless.</p>

CC BY-SA 4.0
2019-05-05T00:05:40.480Z
2019-05-05T18:31:10.467Z
2019-05-05T18:31:10.467Z
Student
<p>It depends on the type of utility.  Generally speaking, utility is either considered to be an <em>ordinal</em> value (one that permits monotone / order-preserving transformations, such as squaring or taking the logarithm) or a <em>cardinal</em> value (one that only permits scaling by a constant factor, such as multiplying all values by three.)</p>

<p>Traditionally, the standard unit for cardinal utility is the "util" (which is a made-up unit created specifically for this purpose.)  But you can substitute any other cardinal measure you like, including dollars.</p>

<p>Note:  In economics, one more often sees reference to ordinal utility.  In voting theory, you may find more references to cardinal utility.</p>

CC BY-SA 4.0
2019-05-20T03:24:28.333Z
2019-05-20T03:24:28.333Z
Bill Clark
<p>I'm trying to show a result that involves utility and money (the latter is in dollars). I would like to know if it is safe to assume that the units of utility is dollars? After all, in auction scenarios, we seem to deduct the bid, which is in dollars from the total utility for the item, and maximize that difference. </p>

<p>Therefore, am I doing the right thing in saying that a utility gain of 10 units can be equated to a gain of 10 dollars?</p>

CC BY-SA 4.0
2019-05-04T11:54:32.447Z
Have you researched this question before posting it? A significant part of the utility chapters of introductory microeconomics textbooks is devoted to this question.
Giskard
CC BY-SA 4.0
2019-05-04T11:59:34.817Z
Possible duplicate of [What was “Pareto's proof of the immeasurability of utility”?](https://economics.stackexchange.com/questions/26947/what-was-paretos-proof-of-the-immeasurability-of-utility?) and  [What is the concept of ordinal utility?](https://economics.stackexchange.com/questions/24840/what-is-the-concept-of-ordinal-utility?)
Giskard
CC BY-SA 4.0
2019-05-04T18:12:49.663Z
The unit of utility is called **util** (see https://www.investopedia.com/university/microeconomics/microeconomics2.asp).
Herr K.
<utility><measuring-utility>
What are the units of utility?
Joebevo
# What are the units of utility?

(Asked by: username_0 on 2019-05-04)

I'm trying to show a result that involves utility and money (the latter is in dollars). I would like to know if it is safe to assume that the units of utility is dollars? After all, in auction scenarios, we seem to deduct the bid, which is in dollars from the total utility for the item, and maximize that difference.

Therefore, am I doing the right thing in saying that a utility gain of 10 units can be equated to a gain of 10 dollars?

**Tags:** utility, measuring-utility

> **Comments:**
> **username_1**: Have you researched this question before posting it? A significant part of the utility chapters of introductory microeconomics textbooks is devoted to this question.  
> **username_1**: Possible duplicate of [What was “Pareto's proof of the immeasurability of utility”?](https://economics.stackexchange.com/questions/26947/what-was-paretos-proof-of-the-immeasurability-of-utility?) and  [What is the concept of ordinal utility?](https://economics.stackexchange.com/questions/24840/what-is-the-concept-of-ordinal-utility?)  
> **username_2**: The unit of utility is called **util** (see https://www.investopedia.com/university/microeconomics/microeconomics2.asp).  

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## 2 answers

### Answer by username_3 on 2019-05-05. Score: 5

No, you can not really say that. Here is the reason:

Utility is generally used to describe preferences. Let's say my happiness is described by this utility of chocolates: $Y(X) = X$. So, two chocolates will give me two units of happiness. However, by definition of preferences, I am allowed to apply monotone transformations to them. Hence, you can just transform that function to $Y(X) = X^2$. Now two chocolates will give me 4 units of happiness.

Again, by definition, this is a completely valid transformation. However, now I am getting 4 dollars instead of $2 because I simply transformed the function. For obvious reasons, you can not do that.

Hence, utility is unitless.


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### Answer by username_4 on 2019-05-20. Score: 0

It depends on the type of utility. Generally speaking, utility is either considered to be an *ordinal* value (one that permits monotone / order-preserving transformations, such as squaring or taking the logarithm) or a *cardinal* value (one that only permits scaling by a constant factor, such as multiplying all values by three.)

Traditionally, the standard unit for cardinal utility is the "util" (which is a made-up unit created specifically for this purpose.) But you can substitute any other cardinal measure you like, including dollars.

Note: In economics, one more often sees reference to ordinal utility. In voting theory, you may find more references to cardinal utility.


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