Econometrica: Jul 1963, Volume 31, Issue 3
Consumer Demand Explained by Measurable Utility Changes
G. S. Tolley, R. W. GiesemanPercentage changes in marginal utility are found to be invariant to utility transformations. They are quantifiable in the ordinary sense, and price and income elasticities can be expressed in terms of them. Definitions of necessity-luxury, independence and complementarity-substitutability in terms of the measurable utility changes lead to insights for empirical studies.
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