On Why the Wold-Juréen (1953) Utility Function Cannot Generate a Giffen Good

7 Pages Posted: 8 Jul 2009

See all articles by Robert Sproule

Robert Sproule

Bishop's University - Department of Economics

Date Written: July 7, 2009

Abstract

Presently, it is widely accepted that the particular utility function first reported by Wold and Juréen (1953), and later by Weber (1997), is capable of generating a Giffen good. This note challenges this view by showing that this Wold-Juréen (1953) utility function is not well-behaved, and that, as a consequence, it does not satisfy the second-order condition for an interior maximum related to the consumer-maximization problem. In view of this, it is argued here that: (a) not only is this utility function incapable of generating a Giffen good, but by extension (b) the so-called demand functions reported by Weber (1997) are not demand functions.

JEL Classification: A2, D1

Suggested Citation

Sproule, Robert, On Why the Wold-Juréen (1953) Utility Function Cannot Generate a Giffen Good (July 7, 2009). Available at SSRN: https://ssrn.com/abstract=1431201 or http://dx.doi.org/10.2139/ssrn.1431201

Robert Sproule (Contact Author)

Bishop's University - Department of Economics ( email )

Lennoxville, Quebec J1M1Z7
Canada
819-822-9600 Ext. 2480 (Phone)

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