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Demand without Utility: The First Evidence

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  • Drew Zhu

Abstract

According to the new attribute theory that is based on but different than Lancasterâs attribute theory, the paper builds a linear programming model of minimizing food cost subject to four nutrient requirements and derives a system of food demand functions from this model with a programming method. This derivation is independence of any utility function and at least is an exception of the utility theory. The programming method, which is neither a parametric nor a typically non-parametric method, allows us to thoroughly understand the mechanism of demandâs formation. The conclusion implies that the new attribute theory and the programming method might be an alternative approach to utility theory and the related estimation methods to derive the demand system.

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  • Drew Zhu, 2016. "Demand without Utility: The First Evidence," 2016 Papers pzh519, Job Market Papers.
    • Handle: RePEc:jmp:jm2016:pzh519
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    References listed on IDEAS

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    1. Dominique, C-Rene, 2007. "Should The Utility Function Be Ditched?," MPRA Paper 5987, University Library of Munich, Germany.
    2. David Atkin, 2013. "Trade, Tastes, and Nutrition in India," American Economic Review, American Economic Association, vol. 103(5), pages 1629-1663, August.
    3. Dominique, C-Rene, 2008. "Walrasian Solutions Without Utility Functions," MPRA Paper 8906, University Library of Munich, Germany, revised 2008.
    4. Pierre Dubois & Rachel Griffith & Aviv Nevo, 2014. "Do Prices and Attributes Explain International Differences in Food Purchases?," American Economic Review, American Economic Association, vol. 104(3), pages 832-867, March.
    5. Arthur E. Attema & Han Bleichrodt & Kirsten I. M. Rohde & Peter P. Wakker, 2010. "Time-Tradeoff Sequences for Analyzing Discounting and Time Inconsistency," Management Science, INFORMS, vol. 56(11), pages 2015-2030, November.
    6. Arthur E. Attema & Han Bleichrodt & Yu Gao & Zhenxing Huang & Peter P. Wakker, 2016. "Measuring Discounting without Measuring Utility," American Economic Review, American Economic Association, vol. 106(6), pages 1476-1494, June.
    7. George J. Stigler, 1950. "The Development of Utility Theory. II," Journal of Political Economy, University of Chicago Press, vol. 58(5), pages 373-373.
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    Cited by:

    1. Zhu, Drew, 2016. "The Mechanism of Giffen Behaviour," MPRA Paper 75707, University Library of Munich, Germany.

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    More about this item

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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