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Innovation, Income Distribution, and Product Variety

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  • Rainer Vosskamp

    ()
    (University of Kassel)

Abstract

On the basis of a modification of K. Lancaster's characteristics approach and a special class of non-homothetic utility functions individual demand functions are derived. Individual demand is determined in a complex way by the income as well as the product qualities and the unit costs of the offered products. It becomes clear that product innovations (changes in product quality), process innovations (changes of unit costs) and changes in personal income distribution (e. g. due to income taxation and redistribution) all influence product variety in a very different way.

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File URL: http://www.uni-marburg.de/fb02/makro/forschung/magkspapers/49-2009_vosskamp.pdf
File Function: First version, 2009
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Bibliographic Info

Paper provided by Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung) in its series MAGKS Papers on Economics with number 200949.

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Length: 36 pages
Date of creation: 2009
Date of revision:
Handle: RePEc:mar:magkse:200949

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Keywords: innovation; income distribution; product variety; Lancaster's characteristics approach;

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