Sato's Insight on the Relationship between the Frisch 'Parameter' and the Average Elasticity of Substitution
AbstractThis short note demonstrates that Sato's 1972 insight concerning the equivalence between Frisch's 'money flexibility' parameter and the average elasticity of substitution among commodities needs to be modified if it is to be applied to non-homothetic utility functions. Fortunately the modification is easily implemented.
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Bibliographic InfoPaper provided by Victoria University, Centre of Policy Studies/IMPACT Centre in its series Centre of Policy Studies/IMPACT Centre Working Papers with number g-99.
Date of creation: Jan 1992
Date of revision:
Other versions of this item:
- Powell, Alan A., 1992. "Sato's insight on the relationship between the Frisch 'parameter' and the average elasticity of substitution," Economics Letters, Elsevier, vol. 40(2), pages 173-175, October.
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Sato, Kazuo, 1972. "Additive Utility Functions with Double-Log Consumer Demand Functions," Journal of Political Economy, University of Chicago Press, vol. 80(1), pages 102-24, Jan.-Feb..
- Kenneth Clements, 2006.
"Price Elasticities of Demand Are Minus One-half,"
Economics Discussion / Working Papers
06-14, The University of Western Australia, Department of Economics.
- Alan A. Powell & Keith R. McLaren & K.R. Pearson & Maureen Rimmer, 2002.
"Cobb-Douglas Utility - Eventually!,"
Monash Econometrics and Business Statistics Working Papers
12/02, Monash University, Department of Econometrics and Business Statistics.
- Alan A. Powell & Keith R. McLaren & K.R. Pearson & Maureen Rimmer, 2002. "Cobb-Douglas Utility - Eventually!," Centre of Policy Studies/IMPACT Centre Working Papers ip-80, Victoria University, Centre of Policy Studies/IMPACT Centre.
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