Innovation, Income Distribution, and Product Variety

Rainer Vosskamp

No 200949, MAGKS Papers on Economics from Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung)

Abstract: On the basis of a modification of K. Lancaster's characteristics approach and a special class of non-homothetic utility functions individual demand functions are derived. Individual demand is determined in a complex way by the income as well as the product qualities and the unit costs of the offered products. It becomes clear that product innovations (changes in product quality), process innovations (changes of unit costs) and changes in personal income distribution (e. g. due to income taxation and redistribution) all influence product variety in a very different way.

Keywords: innovation; income distribution; product variety; Lancaster's characteristics approach (search for similar items in EconPapers)
JEL-codes: D1 L0 O0 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2009
New Economics Papers: this item is included in nep-ino
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https://www.uni-marburg.de/en/fb02/research-groups ... 49-2009_vosskamp.pdf First version, 2009 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:mar:magkse:200949

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