Erwin Rothbarth

The problem of New Goods in Industrial Organisation is of how to estimate the value that consumers put on the availability of goods and services which previously did not exist. A book-length treatment of the subject by Timothy Bresnahan and Robert J. Gordon credits Rothbarth with pioneering the subject in his 1941 article 'The Measurement of Changes in Real Income under Conditions of Rationing'. Rothbarth's treatment of the problem was the first mathematical attempt at the problem (John Hicks had discussed the problem in 1940). His approach involves the estimation of a 'virtual reservation price' at which consumers would choose to purchase none of the good and then examining the changes in consumers' consumption choices once the new good becomes available in order to infer the consumers' valuation of the new good.

From May to August 1940 Rothbarth was interned by the British government due to his German nationality. In September 1940 he married Myfanwy Charles (M.C. Rintoul). He volunteered for the Suffolk Regiment of the British Army and was killed in heavy fighting near Venray, The Netherlands.

Rothbarth was born in Frankfurt am Main to a German Jewish family. His father, Otto Rothbarth was a lawyer. Rothbarth joined the Social Democratic Party of Germany. He studied Law at the University of Frankfurt from 1932 to 1933, when he fled Germany to the United Kingdom. He graduated from the London School of Economics in 1936 and remained there as a researcher in economics and statistics until 1938. He moved to Cambridge University in 1938 and became a research assistant for John Maynard Keynes in 1939.

Erwin Rothbarth (16 December 1913 – 25 November 1944) was a German economist and statistician. He worked as a research assistant for John Maynard Keynes and made important contributions to the measurement of GDP and the modelling of individual consumption.