Rationalizing and Curve-Fitting Demand Data with Quasilinear Utilities
In the empirical and theoretical literature a consumer's utility function is often assumed to be quasilinear. In this paper we provide necessary and sufficient conditions for testing if the consumer acts as if she is maximizing a quasilinear utility function over her budget set. If the consumer's choices are inconsistent with maximizing a quasilinear utility function over her budget set, then we compute the "best" quasilinear rationalization of her choices.
|Date of creation:||Feb 2003|
|Date of revision:||Jul 2004|
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