The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Hicksian and Marshallian Demands

  • Eugene Silberberg
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_2702

Abstract

Soon after the presentation of demand in Alfred Marshall’s Principles of Economics in 1890, a debate ensued concerning whether money income or some sort of real income should be held constant as the price of the good changed. By the mid-20th century, these two conceptions of a demand function became known as the Marshallian and Hicksian functions, respectively. The issue is critical to the interpretation of the area to the left of the demand curve between two prices as some sort of consumer surplus, that is, the gain from purchasing a good at the lower price.

Keywords

Compensated demand Constrained maximum problem Consumer surplus Edgeworth, F. Envelope theorem Hicksian and Marshallian demand curves Homogeneity Income effect Law of demand Marginal utility of income Marginal utility of money Palgrave, R. Pollack, R. Roy’s identity Samuelson, P. Shephard’s lemma Slutsky equation Substitution effect Uncompensated demand 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Eugene Silberberg
    • 1
  1. 1.