Rationalizing and Curve-Fitting Demand Data with Quasilinear Utilities

Donald Brown () and Caterina Calsamiglia ()

No 1399R, Cowles Foundation Discussion Papers from Cowles Foundation, Yale University

Abstract: In the empirical and theoretical literature a consumer's utility function is often assumed to be quasilinear. In this paper we provide necessary and sufficient conditions for testing if the consumer acts as if she is maximizing a quasilinear utility function over her budget set. If the consumer's choices are inconsistent with maximizing a quasilinear utility function over her budget set, then we compute the "best" quasilinear rationalization of her choices.

Keywords: Quasilinear utilities; Afriat inequalities; Curve-fitting (search for similar items in EconPapers)
JEL-codes: D11 D12 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dcm and nep-mic
Date: 2003-02, Revised 2004-07
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