Two-stage budgeting through utility maximization and expenditure minimization under homogeneous separability

Ashley Atoo () and Giulio Codognato ()
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Ashley Atoo: Università degli Studi di Udine
Giulio Codognato: Universita degli Studi di Udine

Economics Bulletin, 2026, vol. 46, issue 2, 787 - 800

Abstract: In this paper, we formulate a hybrid version of the two-stage procedure for the utility maximization problem of a consumer proposed by Green (1964). In particular, we replace the second stage of this procedure with a problem of expenditure minimization. Under the assumption of homogeneous separability, our procedure allows us to specify the price indices of each group of commodities as the minimum expenditure to achieve an utility level equal to one at the prices of the commodities belonging to that group.

Keywords: two-stage procedure; utility maximization; expenditure minimization (search for similar items in EconPapers)
JEL-codes: C6 D1 (search for similar items in EconPapers)
Date: 2026-06-30
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