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Two-stage budgeting through utility maximization and expenditure minimization under homogeneous separability

Author

Listed:
  • Ashley Atoo

    (Università degli Studi di Udine)

  • Giulio Codognato

    (Universita degli Studi di Udine)

Abstract

In this paper, we formulate a hybrid version of the two-stage procedure for the utility maximization problem of a consumer proposed by Green (1964). In particular, we replace the second stage of this procedure with a problem of expenditure minimization. Under the assumption of homogeneous separability, our procedure allows us to specify the price indices of each group of commodities as the minimum expenditure to achieve an utility level equal to one at the prices of the commodities belonging to that group.

Suggested Citation

  • Ashley Atoo & Giulio Codognato, 2026. "Two-stage budgeting through utility maximization and expenditure minimization under homogeneous separability," Economics Bulletin, AccessEcon, vol. 46(2), pages 787-800.
    • Handle: RePEc:ebl:ecbull:eb-25-00429
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    References listed on IDEAS

    as
    1. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    2. Claude d’Aspremont & Rodolphe Dos Santos Ferreira, 2016. "Oligopolistic vs. monopolistic competition: Do intersectoral effects matter?," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 62(1), pages 299-324, June.
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    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling

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