The delimitation of Giffenity for the Wold-Juréen (1953) utility function using relative prices: A note
In the study of Giffen behavior or "Giffenity", there remains a paradox. On one hand, the Wold-Juréen (Demand analysis: A study in Econometrics, 1953) utility function has been touted as the progenitor of a multi-decade search for those two-good, particular utility functions, which exhibit Giffenity. On the other hand, there is no evidence that the Wold- Juréen (1953) utility function has ever been fully evaluated for Giffenity, with perhaps one minor exception, Weber (The case of a Giffen good: Comment, 1997). But there, Weber (1997) showed that the Giffenity of Good 1 depends upon the relative magnitude of income vis-à-vis the price of Good 2. Weber's precondition is so vague that it lacks broad appeal. This paper offers a new and a clear cut precondition for Giffen behavior under the Wold-Juréen (1953) utility function. That is, the author shows that if the price of Good 1 is greater than or equal to the price of Good 2, then Good 1 is a Giffen good.
Year of publication: |
2020
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Authors: | Sproule, Robert A. |
Publisher: |
Kiel : Kiel Institute for the World Economy (IfW) |
Subject: | Slutsky decomposition | Giffen paradox | Wold-Juréen (1953) utility function |
Saved in:
freely available
Series: | Economics Discussion Papers ; 2020-4 |
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Type of publication: | Book / Working Paper |
Type of publication (narrower categories): | Working Paper |
Language: | English |
Other identifiers: | 1692246208 [GVK] hdl:10419/214841 [Handle] RePEc:zbw:ifwedp:20204 [RePEc] |
Classification: | A22 - Undergraduate ; A23 - Graduate ; D11 - Consumer Economics: Theory |
Source: |
Persistent link: https://www.econbiz.de/10012174690