The GFT and Alternative Forms
In the last chapter we showed explicitly how the GFT-direct utility function yields empirically testable hypotheses. Since Cournot, Dupuit and Gossen first laid out what evolved into the modern theory of consumer demand (predicated on the concept of individual utility maximization) a hundred and fifty years ago, virtually hundreds of articles have been written attempting to explicate and measure the theory cf. Stigler (1954). Among the modern contributors, Stone (1954), Houthakker (1960), Theil (1967), Christensen, Jorgenson and Lau (1975), Deaton and Muellbauer (1980a) and Basmann, Molina and Slottje (1983) have all introduced explicit demand functions to test the theory. Some have based their demand systems on explicit utility functions, some have not.
KeywordsUtility Function Demand Function Indifference Curve Demand System Likelihood Ratio Test Statistic
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