Econometrica: Apr 1960, Volume 28, Issue 2

Additive Preferences<244:AP>2.0.CO;2-K
p. 244-257

H. S. Houthakker

This paper considers the notion of additivity in connection with direct and indirect utility functions. The implications of direct and indirect additivity for demand elasticities are derived. An empirical comparison of a directly additive with an indirectly additive preference system suggests that direct additivity is more realistic.

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