Journal Of The Econometric Society

An International Society for the Advancement of Economic
Theory in its Relation to Statistics and Mathematics

Edited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262

Econometrica: Jan, 1965, Volume 33, Issue 1

The Information Approach to Demand Analysis<67:TIATDA>2.0.CO;2-F
p. 67-87

H. Theil

This article approaches demand analysis in a probabilistic manner. The main ingredient is the value share (the proportion of total expenditure spent on a particular commodity), which can be regarded as a probability in view of the fact that it is nonnegative and adds up to one when summed over all commodities.This ingredient is used for the formulation of price and quantity index numbers and demand equations, partly in the light of information theory.

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