A microeconomic analysis of subsistence

Manipushpak Mitra and Debapriya Sen

Indian Economic Review, 2022, vol. 57, issue 2, No 4, 320 pages

Abstract: Abstract We present a microeconomic analysis of subsistence in the consumer theory framework with two goods: the basic good (food) and the non-basic good (non-food). Subsistence results in two regions in the consumption set: the pre-subsistence zone in which the individual’s subsistence requirement is not met and he exclusively cares about the basic good, and the post-subsistence zone. This structure gives subsistence-induced (SI) preferences. Compared to Stone–Geary utility functions, SI preferences give a better understanding of consumption decision problems for people who are on the margins of subsistence and can be useful to clarify related issues such as the use of child labor for poor households.

Keywords: Subsistence; Pre-subsistence zone; Post-subsistence zone; SI preferences (search for similar items in EconPapers)
JEL-codes: D01 D11 O12 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s41775-022-00153-w

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