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Indirect addilog translation of indirect utility functions

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The difficulty of specifying a set of consumer demand equations that can simultaneously display compatibility with rational economic behaviour (regularity) and have the capacity to represent a comprehensive spectrum of consumer behaviour (flexibility) is well known. A variety of approaches have been investigated in the literature, but scope for substantial improvement remains. The approach of this paper is to start from indirect utility functions producing globally regular, if inflexible, systems and to improve flexibility by adding parameters through a device termed ‘indirect addilog translation.’

Keywords: D11

Document Type: Research Article

DOI: http://dx.doi.org/10.1111/j.1540-5982.2006.00394.x

Affiliations: Department of Economics, National University of Ireland Maynooth

Publication date: November 1, 2006

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