Rationalizing and Curve-Fitting Demand Data with Quasilinear Utilities

12 Pages Posted: 16 Aug 2004

See all articles by Donald Brown

Donald Brown

Yale University - Cowles Foundation

Caterina Calsamiglia

Yale University - Department of Economics

Date Written: July 2004

Abstract

In the empirical and theoretical literature a consumer's utility function is often assumed to be quasilinear. In this paper we provide necessary and sufficient conditions for testing if the consumer acts as if she is maximizing a quasilinear utility function over her budget set. If the consumer's choices are inconsistent with maximizing a quasilinear utility function over her budget set, then we compute the best quasilinear rationalization of her choices.

Keywords: Quasilinear utilities, Afriat inequalities, Curve-fitting

JEL Classification: D11, D12

Suggested Citation

Brown, Donald J. and Calsamiglia, Caterina, Rationalizing and Curve-Fitting Demand Data with Quasilinear Utilities (July 2004). Available at SSRN: https://ssrn.com/abstract=576442

Donald J. Brown (Contact Author)

Yale University - Cowles Foundation ( email )

Box 208281
New Haven, CT 06520-8281
United States

Caterina Calsamiglia

Yale University - Department of Economics ( email )

28 Hillhouse Ave
New Haven, CT 06520-8268
United States

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