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Introduction

  • R. L. Basmann
  • D. J. Slottje
  • K. Hayes
  • J. D. Johnson
  • D. J. Molina
Part of the Lecture Notes in Economics and Mathematical Systems book series (LNE, volume 316)

Abstract

Whenever a neoclassical direct utility function is in close (even perfect) agreement with consumer behavior data, there is always an alternative direct utility function that agrees at least as closely with the same data. By ‘agreement’ we mean that a real sample S of consumer data assigns significant likelihood ratio support to the parameters of utility function in question when the latter is tested as a null hypothesis nested within a broader class of utility functions.1 Existence of this equally well (if not better) fitting alternative to such a neoclassical direct utility function has considerable significance for the rational conduct of potential problem analysis in the policy-making arena. [We shall give important examples later in this book.]

Keywords

Utility Function Budget Constraint Demand Function Total Expenditure Ratio Support 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer Science+Business Media New York 1988

Authors and Affiliations

  • R. L. Basmann
    • 1
  • D. J. Slottje
    • 2
  • K. Hayes
    • 2
  • J. D. Johnson
    • 4
  • D. J. Molina
    • 3
  1. 1.Department of EconomicsSUNY BinghamtonBinghamtonUSA
  2. 2.Department of EconomicsSouthern Methodist UniversityDallasUSA
  3. 3.Department of EconomicsUniversity of North TexasDentonUSA
  4. 4.Department of EconomicsUniversity of Mississippi UniversityUSA

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