The Uncompensated Law of Demand: A ‘Revealed Preference’ approach
| Autor: | Edwin Franks, W. D. A. Bryant |
|---|---|
| Rok vydání: | 2017 |
| Předmět: |
Price elasticity of demand
Economics and Econometrics 05 social sciences Unobservable Demand curve Revealed preference 0502 economics and business Economics Giffen good Inverse demand function 050207 economics Differential (infinitesimal) Mathematical economics Finance Law of demand 050205 econometrics |
| Zdroj: | Economics Letters. 152:105-111 |
| ISSN: | 0165-1765 |
| DOI: | 10.1016/j.econlet.2017.01.010 |
| Popis: | Milleron and Malinvaud (1974), Mityushin and Polterovich (1978) and others, provide conditions under which the Uncompensated Law of Demand (ULD) holds. These conditions are based on properties of the consumer’s (unobservable) utility function. In this paper we introduce the new idea of a ‘Giffen commodity vector’ and show how, in terms of it and the derivative of a consumer’s inverse demand, a new necessary and sufficient condition for the ULD may be obtained. As both the Giffen vector and a consumer’s inverse demand are observable, this allows us to obtain a ‘Revealed Preference’ style necessary and sufficient condition for the ULD without relying on conditions based on unobservables such as differential or curvature properties of a consumer’s utility function. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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