IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/82249.html
   My bibliography  Save this paper

The Substitution Effect and the Profit Function in Consumption: expressions from the Marshallian, Hicksian, and Frischian demand functions

Author

Listed:
  • Gimenez-Nadal, Jose Ignacio
  • Molina, Jose Alberto

Abstract

In the context of the maximizing behaviour assumption (Becker, 1976), an individual usually maximizes the utility function, minimizes the cost or, finally, can also maximizes the profit function in consumption, with each of these three optimization problems providing a type of demand function: the Marshallian, the Hicksian, and the Frischian. In all three cases, an important concept for both theoretical and empirical reasons is the Substitution Effect (SE), with this measuring the substitution phenomenon in the demanded quantity in function of the price change. In this context, our short paper offers certain alternative theoretical expressions of the Substitution Effect, focusing on the Profit Function in Consumption, thus introducing the inter-temporal context with perfect information.

Suggested Citation

  • Gimenez-Nadal, Jose Ignacio & Molina, Jose Alberto, 2017. "The Substitution Effect and the Profit Function in Consumption: expressions from the Marshallian, Hicksian, and Frischian demand functions," MPRA Paper 82249, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:82249
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/82249/1/MPRA_paper_82249.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. J. A. Molina, 1994. "Food Demand In Spain: An Application Of The Almost Ideal System," Journal of Agricultural Economics, Wiley Blackwell, vol. 45(2), pages 252-258, May.
    2. Andaluz, Joaquin & Molina, Jose Alberto, 2007. "How do altruistic parental transfers affect the welfare gains of marriage?," Research in Economics, Elsevier, vol. 61(1), pages 1-9, March.
    3. José Alberto Molina & María Navarro & Ian Walker, 2011. "Intergenerational Well‐Being Mobility in Europe," Kyklos, Wiley Blackwell, vol. 64(2), pages 253-270, May.
    4. Bellido, Héctor & Molina, José Alberto & Solaz, Anne & Stancanelli, Elena, 2016. "Do children of the first marriage deter divorce?," Economic Modelling, Elsevier, vol. 55(C), pages 15-31.
    5. Jose Ignacio Gimenez-Nadal & Jose Alberto Molina & Raquel Ortega, 2012. "Self-employed mothers and the work-family conflict," Applied Economics, Taylor & Francis Journals, vol. 44(17), pages 2133-2147, June.
    6. Ashenfelter, Orley & Heckman, James J, 1974. "The Estimation of Income and Substitution Effects in a Model of Family Labor Supply," Econometrica, Econometric Society, vol. 42(1), pages 73-85, January.
    7. Molina, Jose Alberto & Campaña, Juan Carlos & Ortega, Raquel, 2015. "Time dedicated by consumers to cultural goods: Determinants for Spain," MPRA Paper 68430, University Library of Munich, Germany.
    8. Campaña, Juan Carlos & Gimenez-Nadal, J. Ignacio & Molina, José Alberto, 2015. "Gender differences in the distribution of total work-time of Latin- American families: the importance of social norms," MPRA Paper 62759, University Library of Munich, Germany.
    9. Jose Alberto Molina & Iñaki Vazquez & Joaquín Andaluz, 2007. "The stability of intergenerational cooperation in altruistic families," Economics Bulletin, AccessEcon, vol. 3(39), pages 1-7.
    10. Manoli, Dayanand & Weber, Andrea, 2010. "Intertemporal Substitution in Labor Force Participation: Evidence from Policy Discontinuities," IZA Discussion Papers 5248, Institute of Labor Economics (IZA).
    11. J Alberto Molina & J Ignacio Giménez-Nadal & José A Cuesta & Carlos Gracia-Lazaro & Yamir Moreno & Angel Sanchez, 2013. "Gender Differences in Cooperation: Experimental Evidence on High School Students," PLOS ONE, Public Library of Science, vol. 8(12), pages 1-1, December.
    12. José Molina, 2015. "Caring within the Family: Reconciling Work and Family Life," Journal of Family and Economic Issues, Springer, vol. 36(1), pages 1-4, March.
    13. José Molina, 2013. "Altruism in the household: in kind transfers in the context of kin selection," Review of Economics of the Household, Springer, vol. 11(3), pages 309-312, September.
    14. J. Gimenez-Nadal & Jose Molina, 2013. "Parents’ education as a determinant of educational childcare time," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(2), pages 719-749, April.
    15. José Alberto Molina, 1997. "Two-stage Budgeting as an Economic Decision-making Process for Spanish Consumers," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 18(1), pages 27-31.
    16. Inmaculada Garcia & Jose Alberto Molina & Victor Manuel Montuenga, 2010. "Intra-family distribution of paid-work time," Applied Economics, Taylor & Francis Journals, vol. 42(5), pages 589-601.
    17. José Molina, 2014. "Altruism and monetary transfers in the household: inter- and intra-generation issues," Review of Economics of the Household, Springer, vol. 12(3), pages 407-410, September.
    18. José Molina & Víctor Montuenga, 2009. "The Motherhood Wage Penalty in Spain," Journal of Family and Economic Issues, Springer, vol. 30(3), pages 237-251, September.
    19. J. Ignacio Gimenez-Nadal & José Alberto Molina, 2016. "Commuting Time And Household Responsibilities: Evidence Using Propensity Score Matching," Journal of Regional Science, Wiley Blackwell, vol. 56(2), pages 332-359, March.
    20. Inmaculada García-Mainar & José Alberto Molina & Víctor M. Montuenga, 2011. "Gender Differences in Childcare: Time Allocation in Five European Countries," Feminist Economics, Taylor & Francis Journals, vol. 17(1), pages 119-150, January.
    21. Inmaculada García & José Molina & María Navarro, 2007. "How Satisfied are Spouses with their Leisure Time? Evidence from Europe," Journal of Family and Economic Issues, Springer, vol. 28(4), pages 546-565, December.
    22. Altonji, Joseph G, 1986. "Intertemporal Substitution in Labor Supply: Evidence from Micro Data," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 176-215, June.
    23. Inmaculada Garcia & Jose-Alberto Molina & Maria Navarro, 2010. "The effects of education on spouses' satisfaction in Europe," Applied Economics, Taylor & Francis Journals, vol. 42(28), pages 3607-3618.
    24. J. Ignacio Gimenez-Nadal & José Alberto Molina & Yu Zhu, 2018. "Intergenerational mobility of housework time in the United Kingdom," Review of Economics of the Household, Springer, vol. 16(4), pages 911-937, December.
    25. Héctor Bellido & Miriam Marcén & José Alberto Molina, 2016. "The Effect of Culture on Fertility Behavior of US Teen Mothers," Feminist Economics, Taylor & Francis Journals, vol. 22(3), pages 101-126, July.
    26. repec:ebl:ecbull:v:4:y:2007:i:10:p:1-5 is not listed on IDEAS
    27. repec:ebl:ecbull:v:3:y:2007:i:39:p:1-7 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bravo, Yolanda & Rodrigo, Alejandro, 2019. "Analysis of demand characteristics for transport and communication in Spain from 1980 to 2015," MPRA Paper 94055, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ferrando-Latorre, Sandra, 2017. "Risky consumption and intergenerational mobility: a research program in a family context," MPRA Paper 79777, University Library of Munich, Germany.
    2. García, Lucia & Molina, José Alberto, 2017. "The household structure: recent international evolution," MPRA Paper 82049, University Library of Munich, Germany.
    3. García, Lucia, 2018. "Inter-generational and intra-generational transfers: international evidence," MPRA Paper 83986, University Library of Munich, Germany.
    4. Bellido, Héctor, 2020. "La transición del sistema educativo al mercado laboral en Europa: Efectos del abandono escolar en la incorporación al trabajo de los jóvenes europeos [The transition from the education system to th," MPRA Paper 103071, University Library of Munich, Germany.
    5. Boldova, Daniel Miguel, 2019. "Efectos económicos de las leyes sobre la estructura familiar: Evidencia internacional del divorcio y la custodia [Economic effects of family structure laws: International evidence of divorce and cu," MPRA Paper 96440, University Library of Munich, Germany.
    6. Lopez Tris, Carlos Javier, 2020. "Evidencia socioeconómica del abandono escolar en Europa [Socioeconomic evidence of early school leaving in Europe]," MPRA Paper 98124, University Library of Munich, Germany.
    7. Campaña, Juan Carlos, 2017. "¿Pueden llegar a ser adictivos los comportamientos juveniles sedentarios en el hogar? Un programa de investigación con respuestas conceptuales y evidencia empírica [Can sedentary youth behaviors be," MPRA Paper 81401, University Library of Munich, Germany.
    8. Lasierra, Jose Manuel, 2018. "Work and family as factors determining Individual Subjective Well-Being in Spain," MPRA Paper 89404, University Library of Munich, Germany.
    9. Bautista Lacambra, Sergio, 2020. "Household labor supply: Collective results for certain developed countries," MPRA Paper 101514, University Library of Munich, Germany.
    10. Ferrando-Latorre, Sandra & Velilla, Jorge, 2018. "La transmisión intergeneracional de la actividad emprendedora en las familias españolas [Intergeneration transmissions of the entrepreneurial activity in Spanish households]," MPRA Paper 83573, University Library of Munich, Germany.
    11. Bautista-Lacambra, Sergio, 2020. "El ciclo vital en la familia:una estructura conceptual dinámica [A family's life-cycle: A conceptual dynamic structure]," MPRA Paper 102514, University Library of Munich, Germany.
    12. Miranda-Buetas, Sara & Gracia-Raluy, Elisa, 2019. "Análisis de los Patrones de Demanda en el Sector Textil Español [Demand Analysis of Clothing Sector in Spain]," MPRA Paper 92430, University Library of Munich, Germany.
    13. García, Lucia, 2018. "El mercado laboral en España desde la oferta: evolución reciente nacional y regional [Supply labour market in Spain: recent evolution at a national and regional level]," MPRA Paper 85262, University Library of Munich, Germany.
    14. Perchín Milián, Celia & Cañoto Martínez, Miguel, 2019. "Gastos Médicos en España: Estimaciones del Sistema de Demanda Casi Ideal y del Modelo de Rotterdam [Medical Expenses in Spain: Estimations of the Almost Ideal Demand System and of the Rotterdam Mod," MPRA Paper 92400, University Library of Munich, Germany.
    15. José Alberto Molina & Juan Carlos Campaña & Raquel Ortega, 2017. "Children’s interaction with the Internet: time dedicated to communications and games," Applied Economics Letters, Taylor & Francis Journals, vol. 24(6), pages 359-364, March.
    16. Campaña, Juan Carlos & Gimenez-Nadal, J. Ignacio & Molina, Jose Alberto, 2016. "Diferencias entre auto-empleados y asalariados en los usos del tiempo: Aragón vs. Spain [Differences between self-employees and wage-earners in time uses: Aragon vs. Spain]," MPRA Paper 71463, University Library of Munich, Germany.
    17. Mora Gómez, Manuel & Mompel Lancina, David, 2019. "Cultura, educación y ocio en España: Estimaciones del Sistema de Demanda Casi Ideal y del Modelo de Rotterdam [Culture, education and laisure in Spain: Estimation of the Ideal demand system and Rot," MPRA Paper 94477, University Library of Munich, Germany.
    18. Baigorri, Bárbara & Ledesma, Ana, 2019. "Rentas de vivienda y suministros en el hogar: Selección del modelo microeconómico ideal para representar las preferencias del consumidor [Household income and supplies in the home: Selection of the," MPRA Paper 93265, University Library of Munich, Germany.
    19. Alcay, Alejandro & Escudero, Carlos, 2019. "Efectos de la renta y los precios en la demanda de alimentos: un análisis para el caso español 1980-2015 [Efects of income and prices in food demand: an analysis for the Spanish case 1980-2015]," MPRA Paper 92698, University Library of Munich, Germany.
    20. José Alberto Molina & Juan Carlos Campaña & Raquel Ortega, 2016. "Time spent on cultural activities at home in Spain: Differences between wage-earners and the self-employed," Documentos de Trabajo dt2016-01, Facultad de Ciencias Económicas y Empresariales, Universidad de Zaragoza.

    More about this item

    Keywords

    Demand analysis; Substitution Effect; Profit Function in Consumption; Marshallian; Hicksian and Frischian demand functions;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:82249. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.