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Indirect addilog translation of indirect utility functions

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  • Denis Conniffe

Abstract

The difficulty of specifying a set of consumer demand equations that can simultaneously display compatibility with rational economic behaviour (regularity) and have the capacity to represent a comprehensive spectrum of consumer behaviour (flexibility) is well known. A variety of approaches have been investigated in the literature, but scope for substantial improvement remains. The approach of this paper is to start from indirect utility functions producing globally regular, if inflexible, systems and to improve flexibility by adding parameters through a device termed ‘indirect addilog translation.’ On connaît bien la difficulté de spécifier un ensemble d'équations de demande du consommateur qui puisse en même temps être compatible avec un comportement économique rationnel (régularité) et avoir la capacité de représenter un spectre compréhensif de comportements du consommateur (flexibilité). La littérature spécialisée a proposé une variété d'approches, mais il y a encore place à beaucoup d'amélioration. L'approche suggérée dans ce mémoire part des fonctions indirectes d'utilité qui produisent des systèmes globalement réguliers, même s'ils sont inflexibles, et en améliore la flexibilité en ajoutant des paramètres via un procédé qu'on a nommé≪traduction indirecte addilog ≫.

Suggested Citation

  • Denis Conniffe, 2006. "Indirect addilog translation of indirect utility functions," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 39(4), pages 1388-1397, November.
    • Handle: RePEc:wly:canjec:v:39:y:2006:i:4:p:1388-1397
    DOI: 10.1111/j.1540-5982.2006.00394.x
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    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory

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