Preferences and Normal Goods: An Easy-to-Check Necessary and Sufficient Condition
We provide a necessary and sufficient condition for goods to be normal when utility functions are differentiable and strongly quasi-concave. Our condition is equivalent to the condition proposed by Alarie et al. (1990), but it is easier to check: it only requires to compute the minors associated with the border column (or row) of the bordered Hessian matrix of the utility function.
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- Alarie, Y. & Bronsard, C. & Ouellette, P., 1988.
"Preferences and Normal Goods : a Necessary and Sufficient Condition,"
Cahiers de recherche
8815, Universite de Montreal, Departement de sciences economiques.
- Alarie, Yves & Bronsard, Camille & Ouellette, Pierre, 1990. "Preferences and normal goods: A necessary and sufficient condition," Journal of Economic Theory, Elsevier, vol. 51(2), pages 423-430, August.
- Alarie, Y. & Bronsard, C. & Ouellette, P., 1988. "Preferences And Normal Goods : A Necessary And Sufficient Condition," Cahiers de recherche 8815, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
- John K.-H Quah, 2007. "The Comparative Statics of Constrained Optimization Problems," Econometrica, Econometric Society, vol. 75(2), pages 401-431, 03.
- Leroux, Alain, 1987. "Preferences and normal goods: A sufficient condition," Journal of Economic Theory, Elsevier, vol. 43(1), pages 192-199, October.
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