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An analysis of the substitution effect and of revenue effect in the case of the consumer’s theory provided with an Allen utility function

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  • Catalin Angelo IOAN

    (Danubius University of Galati, Department of Finance and Business Administration)

  • Gina IOAN

    (Danubius University of Galati, Department of Finance and Business Administration)

Abstract

In the consumer’s theory, a crucial problem is to determine the substitution effect and the revenue effect in the case of one good price’s modifing. There exists two theories due to John Richard Hicks and Eugen Slutsky which allocates differents shares of the total change of the consumption to these effects. The paper makes an analysis between the two effects, considering the general case of an Allen utility function.

Suggested Citation

  • Catalin Angelo IOAN & Gina IOAN, 2014. "An analysis of the substitution effect and of revenue effect in the case of the consumer’s theory provided with an Allen utility function," The Journal of Accounting and Management, Danubius University of Galati, issue 3, pages 15-19, December.
    • Handle: RePEc:dug:jaccma:y:2014:i:3:p:15-19
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    File URL: http://journals.univ-danubius.ro/index.php/jam/article/view/2708
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    References listed on IDEAS

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    1. Mishra, SK, 2007. "A Brief History of Production Functions," MPRA Paper 5254, University Library of Munich, Germany.
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    Keywords

    Allen; substitution; revenue; utility;
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