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A microeconomic analysis of subsistence

Author

Listed:
  • Manipushpak Mitra

    (Indian Statistical Institute)

  • Debapriya Sen

    (Toronto Metropolitan University)

Abstract

We present a microeconomic analysis of subsistence in the consumer theory framework with two goods: the basic good (food) and the non-basic good (non-food). Subsistence results in two regions in the consumption set: the pre-subsistence zone in which the individual’s subsistence requirement is not met and he exclusively cares about the basic good, and the post-subsistence zone. This structure gives subsistence-induced (SI) preferences. Compared to Stone–Geary utility functions, SI preferences give a better understanding of consumption decision problems for people who are on the margins of subsistence and can be useful to clarify related issues such as the use of child labor for poor households.

Suggested Citation

  • Manipushpak Mitra & Debapriya Sen, 2022. "A microeconomic analysis of subsistence," Indian Economic Review, Springer, vol. 57(2), pages 301-320, December.
    • Handle: RePEc:spr:inecre:v:57:y:2022:i:2:d:10.1007_s41775-022-00153-w
    DOI: 10.1007/s41775-022-00153-w
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    References listed on IDEAS

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    More about this item

    Keywords

    Subsistence; Pre-subsistence zone; Post-subsistence zone; SI preferences;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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