A Precondition-Free Demonstration That the Wold-Juréen (1953) Utility Function (Always) Generates a Giffen Good

Sproule, Robert and Karras, Michael (2022): A Precondition-Free Demonstration That the Wold-Juréen (1953) Utility Function (Always) Generates a Giffen Good.

Abstract

Both Weber (1997) and Sproule (2020) offered a precondition for the existence of Giffenity when the decision maker's utility function is the Wold-Juréen (1953) utility function. The purpose of this paper is to show that all preconditions (including those due to Weber (1997) and Sproule (2020)) are superfluous, in the present demonstration that the inferior good in the Wold-Juréen (1953) utility function is also a Giffen good. Our success relies upon our use of both of the Marshallian demand functions, rather than just one, as is the case in both Weber (1997) and Sproule (2020). In brief, the present paper offers a precondition-free demonstration that the Wold-Juréen (1953) utility function will (always) generate a Giffen good.

• Item Type: MPRA Paper
• Language: English
• Keywords: Slutsky decomposition, Giffen Good, Wold-Juréen (1953) utility function, pedagogy.
• Subjects: A - General Economics and Teaching > A2 - Economic Education and Teaching of Economics > A22 - Undergraduate; A - General Economics and Teaching > A2 - Economic Education and Teaching of Economics > A23 - Graduate; D - Microeconomics > D1 - Household Behavior and Family Economics > D11 - Consumer Economics: Theory

References

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Spiegel, U. (1994), "The case of a 'Giffen good,” Journal of Economic Education 25. 137-48.

Sproule, R. (2020), “The delimitation of Giffenity for The Wold-Juréen (1953) utility function using relative prices: A note,” Economics: The Open-Access, Open-Assessment E-Journal.

Weber, C.E. (1997), “The case of a Giffen good: Comment,” Journal of Economic Education 28, 36-44.

Wold, H., and L. Juréen (1953), Demand Analysis: A Study in Econometrics (New York, New York: Wiley).