IDEAS home Printed from https://ideas.repec.org/a/spr/joecth/v32y2007i3p579-587.html
   My bibliography  Save this article

Market Demand Elasticity and Income Inequality

Author

Listed:
  • Marat Ibragimov
  • Rustam Ibragimov

Abstract

This paper deals with the analysis of the relation between aggregate demand for a consumption good and the distribution of income across consumers. We obtain sufficient conditions under which changes in income inequality lead to an increase or decrease in the market demand elasticities. The conditions are satisfied for individual demand functions commonly used in economic models, in particular, for the typical demand functions on luxury goods and necessities.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Marat Ibragimov & Rustam Ibragimov, 2007. "Market Demand Elasticity and Income Inequality," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 32(3), pages 579-587, September.
    • Handle: RePEc:spr:joecth:v:32:y:2007:i:3:p:579-587
    DOI: 10.1007/s00199-006-0125-3
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s00199-006-0125-3
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s00199-006-0125-3?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Basu, Kaushik, 1987. "Axioms for a fuzzy measure of inequality," Mathematical Social Sciences, Elsevier, vol. 14(3), pages 275-288, December.
    2. Thibault Gajdos & John Weymark, 2005. "Multidimensional generalized Gini indices," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 26(3), pages 471-496, October.
    3. Roberto Perotti, 1993. "Political Equilibrium, Income Distribution, and Growth," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 60(4), pages 755-776.
    4. Moyes, Patrick, 1989. "Some classes of functions that preserve the inequality and welfare orderings of income distributions," Journal of Economic Theory, Elsevier, vol. 49(2), pages 347-359, December.
    5. Efe A. Ok, 1996. "Fuzzy measurement of income inequality: Some possibility results on the fuzzification of the Lorenz ordering (*)," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 7(3), pages 513-530.
    6. James S. Eales & Laurian J. Unnevehr, 1988. "Demand for Beef and Chicken Products: Separability and Structural Change," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 70(3), pages 521-532.
    7. Harvey E. Lapan & David A. Hennessy, 2002. "Symmetry and order in the portfolio allocation problem," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 19(4), pages 747-772.
    8. Cecilia García-Peñalosa & Stephen Turnovsky, 2006. "Growth and income inequality: a canonical model," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 28(1), pages 25-49, May.
    9. Per Pinstrup-Andersen & Elizabeth Caicedo, 1978. "The Potential Impact of Changes in Income Distribution on Food Demand and Human Nutrition," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 60(3), pages 402-415.
    10. Alberto Alesina & Dani Rodrik, 1994. "Distributive Politics and Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(2), pages 465-490.
    11. Le Breton, Michel & Moyes, Patrick & Trannoy, Alain, 1996. "Inequality Reducing Properties of Composite Taxation," Journal of Economic Theory, Elsevier, vol. 69(1), pages 71-103, April.
    12. Gerhard Sorger, 2000. "Income and wealth distribution in a simple model of growth," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 16(1), pages 23-42.
    13. Saposnik, Rubin, 1993. "A note on majorization theory and the evaluation of income distributions," Economics Letters, Elsevier, vol. 42(2-3), pages 179-183.
    14. David A. Hennessy & Harvey E. Lapan, 2003. "An algebraic theory of portfolio allocation," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 22(1), pages 193-210, August.
    15. Roland Bénabou, 1996. "Inequality and Growth," NBER Chapters, in: NBER Macroeconomics Annual 1996, Volume 11, pages 11-92, National Bureau of Economic Research, Inc.
    16. Senauer, Benjamin, 1990. "Household behaviour and nutrition in developing countries," Food Policy, Elsevier, vol. 15(5), pages 408-417, October.
    17. Philippe Aghion, 2002. "Schumpeterian Growth Theory and the Dynamics of Income Inequality," Econometrica, Econometric Society, vol. 70(3), pages 855-882, May.
    18. Dasgupta, Partha & Sen, Amartya & Starrett, David, 1973. "Notes on the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 6(2), pages 180-187, April.
    19. Perotti, Roberto, 1994. "Income distribution and investment," European Economic Review, Elsevier, vol. 38(3-4), pages 827-835, April.
    20. Tapan Mitra & Efe A. Ok, 1998. "The measurement of income mobility: A partial ordering approach," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 12(1), pages 77-102.
    21. repec:bla:econom:v:50:y:1983:i:197:p:3-17 is not listed on IDEAS
    22. Sen, Amartya, 1973. "On Economic Inequality," OUP Catalogue, Oxford University Press, number 9780198281931.
    23. Gleb Koshevoy, 1997. "The Lorenz zonotope and multivariate majorizations," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 15(1), pages 1-14.
    24. Moyes, Patrick, 1989. "Equiproportionate Growth of Incomes and After-Tax Inequality," Bulletin of Economic Research, Wiley Blackwell, vol. 41(4), pages 287-294, October.
    25. Persson, Torsten & Tabellini, Guido, 1994. "Is Inequality Harmful for Growth?," American Economic Review, American Economic Association, vol. 84(3), pages 600-621, June.
    26. Perotti, Roberto, 1992. "Income Distribution, Politics, and Growth," American Economic Review, American Economic Association, vol. 82(2), pages 311-316, May.
    27. Arnold, Barry C, 1990. "The Lorenz Order and the Effects of Taxation Policies," Bulletin of Economic Research, Wiley Blackwell, vol. 42(4), pages 249-264, October.
    28. Thon, Dominique, 1987. "Redistributive properties of progressive taxation," Mathematical Social Sciences, Elsevier, vol. 14(2), pages 185-191, October.
    29. Eichhorn, Wolfgang & Funke, Helmut & Richter, Wolfram F., 1984. "Tax progression and inequality of income distribution," Journal of Mathematical Economics, Elsevier, vol. 13(2), pages 127-131, October.
    30. Ernesto Savaglio, 2006. "Multidimensional inequality with variable population size," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 28(1), pages 85-94, May.
    31. Christian Ghiglino & Marielle Olszak-Duquenne, 2001. "Inequalities and fluctuations in a dynamic general equilibrium model," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 17(1), pages 1-24.
    32. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    33. You-qiang Wang & Kai-yuen Tsui, 2000. "A new class of deprivation-based generalized Gini indices," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 16(2), pages 363-377.
    34. Moyes Patrick, 1994. "Inequality Reducing and Inequality Preserving Transformations of Incomes: Symmetric and Individualistic Transformations," Journal of Economic Theory, Elsevier, vol. 63(2), pages 271-298, August.
    35. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-326, June.
    36. John L. Park & Rodney B. Holcomb & Kellie Curry Raper & Oral Capps, 1996. "A Demand Systems Analysis of Food Commodities by U.S. Households Segmented by Income," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(2), pages 290-300.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Marat Ibragimov & Rustam Ibragimov & Paul Kattuman & Jun Ma, 2018. "Income inequality and price elasticity of market demand: the case of crossing Lorenz curves," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 65(3), pages 729-750, May.
    2. Jihui Chen & Maochao Xu, 2015. "Asymmetry and revenue in second-price auctions: a majorization approach," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 39(3), pages 625-640, July.
    3. Rustam Ibragimov & Marat Ibragimov & Rufat Khamidov, 2010. "Measuring Inequality in CIS Countries: Theory and Empirics," wiiw Balkan Observatory Working Papers 88, The Vienna Institute for International Economic Studies, wiiw.
    4. C. Benassi & E. Randon, 2015. "Optimal Commodity Taxation and Income Distribution," Working Papers wp1001, Dipartimento Scienze Economiche, Universita' di Bologna.
    5. Hennessy, David A. & Lapan, Harvey E., 2009. "Harmonic symmetries of imperfect competition on circular city," Journal of Mathematical Economics, Elsevier, vol. 45(1-2), pages 124-146, January.
    6. Rustam Ibragimov & Marat Ibragimov & Jovlon Karimov & Galiya Yuldasheva, 2012. "Robust Analysis of Income Inequality Dynamics in Russia: t-Statistic Based Approaches," wiiw Balkan Observatory Working Papers 105, The Vienna Institute for International Economic Studies, wiiw.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rustam Ibragimov & Marat Ibragimov & Rufat Khamidov, 2010. "Measuring Inequality in CIS Countries: Theory and Empirics," wiiw Balkan Observatory Working Papers 88, The Vienna Institute for International Economic Studies, wiiw.
    2. Carbonell-Nicolau, Oriol & Llavador, Humberto, 2018. "Inequality reducing properties of progressive income tax schedules: the case of endogenous income," Theoretical Economics, Econometric Society, vol. 13(1), January.
    3. Daniele Checchi, 1999. "Inequality in Incomes and Access to Education. A Cross-Country Analysis (1960-90)," Working Papers 21, University of Milano-Bicocca, Department of Economics, revised May 1999.
    4. Evans Jadotte, 2006. "Income Distribution and Poverty in the Republic of Haiti," Working Papers PMMA 2006-13, PEP-PMMA.
    5. Orsetta Causa & Alain de Serres & Nicolas Ruiz, 2015. "Can pro-growth policies lift all boats?: An analysis based on household disposable income," OECD Journal: Economic Studies, OECD Publishing, vol. 2015(1), pages 227-268.
    6. Chakravarty, Satya R. & Sarkar, Palash, 2022. "A synthesis of local and effective tax progressivity measurement," MPRA Paper 115180, University Library of Munich, Germany.
    7. Alain Chateauneuf & Patrick Moyes, 2002. "Measuring inequality without the Pigou-Dalton condition," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00156475, HAL.
    8. Ugo Panizza, 1999. "Desigualdad del ingreso y crecimiento económico: elementos de juicio de datos de USA," Research Department Publications 4179, Inter-American Development Bank, Research Department.
    9. Francisco Rodríguez, 2004. "Inequality, Redistribution, And Rent‐Seeking," Economics and Politics, Wiley Blackwell, vol. 16(3), pages 287-320, November.
    10. Klaus Schmidt-Hebbel & José-Carlos Tello, 2014. "The Political Economy of Growth, Inequality, the Size and Composition of Government Spending," Working Papers 19, Peruvian Economic Association.
    11. Moyes, Patrick, 2003. "Redistributive effects of minimal equal sacrifice taxation," Journal of Economic Theory, Elsevier, vol. 108(1), pages 111-140, January.
    12. Charles-Coll, Jorge A., 2010. "The optimal rate of inequality: A framework for the relationship between income inequality and economic growth," MPRA Paper 28921, University Library of Munich, Germany.
    13. Gravel, Nicolas & Poitevin, Michel, 2006. "The progressivity of equalization payments in federations," Journal of Public Economics, Elsevier, vol. 90(8-9), pages 1725-1743, September.
    14. Martino, Gaetano & Polinori, Paolo, 2010. "The individual contribution to income inequality: conceptual analysis and empirical investigation," MPRA Paper 34365, University Library of Munich, Germany.
    15. Chang, Roberto, 1998. "Political party negotiations, income distribution, and endogenous growth," Journal of Monetary Economics, Elsevier, vol. 41(2), pages 227-255, April.
    16. Kevin Sylwester, 2003. "Enrolment in Higher Education and Changes in Income Inequality," Bulletin of Economic Research, Wiley Blackwell, vol. 55(3), pages 249-262, July.
    17. Chaudhry, Azam & Garner, Phillip, 2013. "The political economy of income comparisons and economic growth," Economic Modelling, Elsevier, vol. 31(C), pages 214-222.
    18. Bozhechkova, Aleksandra & Vashchelyuk, Natalia & Nazarov, Pavel & Perevyshin, Yuri & Tumanova, Elena & Shagas, Natalia, "undated". "Modeling the Dynamic of Economic Potential," Published Papers nvg143, Russian Presidential Academy of National Economy and Public Administration.
    19. Figini, P, 1999. "Inequality and Growth Revisited," Trinity Economics Papers 992, Trinity College Dublin, Department of Economics.
    20. Chicchi, D., 1999. "Inequality in Income and Access to Education: A Cross-Country Analysis," Research Paper 158, World Institute for Development Economics Research.

    More about this item

    Keywords

    Income inequality; Market demand; Elasticity; D11; D31; D63;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:joecth:v:32:y:2007:i:3:p:579-587. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.