Income elasticity and international income differences

Junmin Liao and Wei Wang

Economics Letters, 2018, vol. 169, issue C, 68-71

Abstract: The constant relative income elasticity generated by non-homothetic CES preferences is consistent with cross-country empirical evidence. We show that non-homothetic CES preferences fit empirical patterns better than Stone–Geary preferences in a standard framework in the international income differences literature.

Keywords: Income elasticity; Income differences; Non-homothetic CES; Stone–Geary CES; Agriculture (search for similar items in EconPapers)
JEL-codes: O1 O4 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:169:y:2018:i:c:p:68-71

DOI: 10.1016/j.econlet.2018.05.019

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