ENGLISH

The Generalized Fechner-Thurstone Direct Utility Function and Some of its Uses

By R. L. Basmann , D. J. Slottje , K. Hayes , J. D. Johnson , D. J. Molina (auth.)

Book information

Publisher
Springer-Verlag New York
Year
1988
ISBN
978-0-387-96853-7, 978-1-4684-9401-3
DOI
10.1007/978-1-4684-9401-3
Language
english
Format
PDF
Filesize
6 MB (5902571 bytes)
Series
Lecture Notes in Economics and Mathematical Systems 316
Edition
1
Pages
159\161
Time added
2014-01-18 08:00:00
Economic Theory

Description

In this book the foundations and applicability of the Generalized Fechner-Thurstone Utility Function are laid out. It is shown how by removing the constraint of fixed preferences in the neoclassical consumer theory, utility theory can be used to develop non-parametric indices along with elasticities of the marginal rates of substitutions. It is also shown that whereas the existence of a fixed preference utility function is not always guaranteed for different demand functions, there will always exist at least one Generalized Fechner-Thurstone Direct Utility Function. Furthermore, analysis using the Fechner-Thurstone Direct Utility Function is clear and simple and does not rely on ad hoc Taylor expansions. The construction of different true-cost-of-living indices, the comparison of North American consumers, and a habit formation model are developed to show the usefulness of the Generalized Fechner-Thurstone Direct Utility Function.

Similar books