The Generalized Alchian-Allen Theorem
AbstractThe Alchian-Allen substitution theorem states that an increase of the prices of two similar goods by the same amount leads to a relative increase in the compensated demand of the more expensive good. In this paper we generalize this theorem to ordinary demand functions and show under which conditions the Alchian-Allen result continues to hold when income and endowment effects are taken into account.
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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3969.
Date of creation: 2012
Date of revision:
The Alchian-Allen theorem; income and endowment effects;
Find related papers by JEL classification:
- D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
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- David Hummels & Alexandre Skiba, 2004.
"Shipping the Good Apples Out? An Empirical Confirmation of the Alchian-Allen Conjecture,"
Journal of Political Economy,
University of Chicago Press, vol. 112(6), pages 1384-1402, December.
- David Hummels & Alexandre Skiba, 2002. "Shipping the Good Apples Out? An Empirical Confirmation of the Alchian-Allen Conjecture," NBER Working Papers 9023, National Bureau of Economic Research, Inc.
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- Yoram Bauman, 2004. "Shipping the Good Apples Out: A New Perspective," Economic Inquiry, Western Economic Association International, vol. 42(3), pages 534-536, July.
- Robert Lawson & Lauren Raymer, 2006. "Testing the Alchian-Allen Theorem: A Study of Consumer Behavior in the Gasoline Market," Economics Bulletin, AccessEcon, vol. 4(35), pages 1-6.
- Borcherding, Thomas E & Silberberg, Eugene, 1978. "Shipping the Good Apples Out: The Alchian and Allen Theorem Reconsidered," Journal of Political Economy, University of Chicago Press, vol. 86(1), pages 131-38, February.
- T Nesbit, 2007. "Excise Taxation and Product Quality: The Gasoline Market," Economic Issues Journal Articles, Economic Issues, vol. 12(2), pages 1-14, September.
- repec:ebl:ecbull:v:4:y:2006:i:35:p:1-6 is not listed on IDEAS
- Minagawa, Junichi & Upmann, Thorsten, 2013. "A conditional demand approach to the Alchian–Allen effect," Economics Letters, Elsevier, vol. 120(3), pages 546-551.
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