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Subsistence induced and complementarity induced irrelevance in preferences

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  • Mitra, Manipushpak
  • Sen, Debapriya

Abstract

In a two-good setting we axiomatize (a) preferences with subsistence consumption and (b) a generalized version of Leontief preferences. Our axiomatization allows for different levels of subsistence and captures the presence of poverty and prosperity. Our axioms are based on the irrelevance of one of the goods at certain consumption bundles. For subsistence, the irrelevance is induced by the subsistence requirement and for generalized Leontief, it is induced by complementarity. We capture this difference using the notion of unhappy sets.

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  • Mitra, Manipushpak & Sen, Debapriya, 2014. "Subsistence induced and complementarity induced irrelevance in preferences," MPRA Paper 59474, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:59474
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    References listed on IDEAS

    as
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    2. Sharif, Mohammed, 1986. "The Concept and measurement of subsistence: A survey of the literature," World Development, Elsevier, vol. 14(5), pages 555-577, May.
    3. Steger, Thomas M., 2000. "Economic growth with subsistence consumption," Journal of Development Economics, Elsevier, vol. 62(2), pages 343-361, August.
    4. Rebelo, Sergio, 1992. "Growth in open economies," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 36(1), pages 5-46, July.
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    8. Svedberg, Peter, 2000. "Poverty and Undernutrition: Theory, Measurement, and Policy," OUP Catalogue, Oxford University Press, number 9780198292685.
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    More about this item

    Keywords

    Subsistence; irrelevance; unhappy sets; generalized Leontief;
    All these keywords.

    JEL classification:

    • 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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