The Econometric SocietyEdited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262
Econometrica: Nov, 1980, Volume 48, Issue 7
https://doi.org/0012-9682(198011)48:7<1727:TCSOQC>2.0.CO;2-C
p. 1727-1744
Gerald A. Whitney, Robert J. Mackay
This paper presents a decomposition of the total effect of a change in a quantity constraint on the money income constant conditional demand function into an income compensated substitution effect and a pure income effect. The substitution effect is shown to be equivalent to the Hicks substitute-complementrelation while the income effect is shown to depend directly on the extent of over-or under-supply of the constrained good. The Tobin-Houthakker results on rationing constraints can be generalized in an intuitive manner to cases of non-optimal values of the constraint when the two goods involved are: (1) Hicks substitutes, the constrained good is over-supplied and the unconstrained good is a normal good; or, (2) Hicks complements, the constrained good is under-supplied and the unconstained good is a normal good. In the case of substitutes and under-supply or complements and over-supply, the sing of the Hicks substitute-Complement relation is not sufficient to determine the sign of the partial derivative of interest. Several aplications of the theoretical results are also presented.
March 5, 2024
The terms of the Editors of the Econometric Society's three journals end June 30, 2025. We are pleased to announce the incoming Editors and to thank the outgoing Editors for their excellent and continuing service.
Econometrica: Since 2019, Guido Imbens has served as the 14th Editor of Econometrica. On July 1, 2025, Marina Halac will become the Editor.
Quantitative Economics: Stéphane Bonhomme has been the Editor of Quantitative Economics since 2021. His successor will be Bernard Salanié.
Theoretical Economics: The Editor of Theoretical Economics since 2021 has been Simon Board. Taking over for him in July 2025 will be Federico Echenique.
Guido, Stéphane, and Simon have been outstanding Editors. We are grateful to them for the work they have done and will continue to do, and we look forward to further congratulating them next year. We believe Marina, Bernard, and Federico will be outstanding successors and we thank them in advance for their service.
Finally, we are grateful to Larry Samuelson for chairing all three search committees, and we thank the search committee members for their hard and fruitful work:
Econometrica: Christian Dustmann, Lars Hansen, Alessandro Lizzeri, George Mailath, Ariel Pakes, Helene Rey, and Elie Tamer.
QE: Kate Ho, Michael Keane, Felix Kubler, Whitney Newey, and Frank Schorfheide.
TE: Jeff Ely, Johannes Horner, Gilat Levy, Meg Meyer, and Ran Spiegler.
