Luxuries Are Easier to Postpone: A Proof

Martin Browning and Thomas Crossley (tfcross@umich.edu)

Journal of Political Economy, 2000, vol. 108, issue 5, 1022-1026

Abstract: We show that (Marshallian) income elasticities are proportional to (Frisch) own price elasticities if all goods are additively separable. This implies that luxuries are likely to be easier to postpone. It also implies that preferences over "consumption" are unlikely to display a constant elasticity of substitution.

Date: 2000
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