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Identification of the Conditions for Increasing Dimensionality of the Income Expansion Path

Author

Listed:
  • Siddhartha Mitra

    (Department of Economics, Jadavpur University)

  • Nilangshu Acharya

    (Department of Mathematics, P.R. Thakur Govt. College)

  • Samir Kumar Bhandari

    (Department of Math., Bajkul Milani Mahavidyalaya)

Abstract

This paper determines sufficient conditions for a utility function to be associated with an income expansion path whose dimensionality increases with income i.e. given a finite number of products, the relationship between income and dimensionality of the consumption vector is given by a step function such that successive intervals on the real number line (each real number gives an income level) map on to consumption vectors of increasing dimensionality. This constitutes an important investigation as the rich are observed to exhibit greater consumption variety than the poor and the same household exhibits increasing product variety as its income increases over time.

Suggested Citation

  • Siddhartha Mitra & Nilangshu Acharya & Samir Kumar Bhandari, 2019. "Identification of the Conditions for Increasing Dimensionality of the Income Expansion Path," Economics Bulletin, AccessEcon, vol. 39(4), pages 2664-2673.
    • Handle: RePEc:ebl:ecbull:eb-19-00488
    as

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    References listed on IDEAS

    as
    1. Varian, Hal R, 1985. "Price Discrimination and Social Welfare," American Economic Review, American Economic Association, vol. 75(4), pages 870-875, September.
    2. Varian, Hal R, 1982. "The Nonparametric Approach to Demand Analysis," Econometrica, Econometric Society, vol. 50(4), pages 945-973, July.
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    More about this item

    Keywords

    Income expansion path; dimensionality; utility function;
    All these keywords.

    JEL classification:

    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • A1 - General Economics and Teaching - - General Economics

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