 A Class of Indirect Utility Functions Predicting Giffen BehaviourA chapter in New Insights into the Theory of Giffen Goods, 2012, pp 127-141 from Springer Abstract: Abstract The problem of recognising Giffen behaviour is approached from the standpoint of the indirect utility function (IUF) from which the Marshallian demands are easily obtained via Roy’s identity. It is shown that, for the two-good situation, downward convergence of the contours of the IUF is necessary for giffenity, and sufficient if this downward convergence is strong enough, in a sense that is geometrically determined. A family of IUFs involving hyperbolic contours convex to the origin, and having this property of (locally) downward convergence is constructed. The Marshallian demands are obtained, and the region of Giffen behaviour determined. For this family, such regions exist for each good, and are non-overlapping. Finally, it is shown by geometric construction that the family of Direct Utility Functions having the same pattern of hyperbolic contours also exhibits giffenity in corresponding subregions of the positive quadrant. Keywords: Utility Function; Maximum Curvature; Indirect Utility Function; Consumer Theory; Budget Line (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:spr:lnechp:978-3-642-21777-7_10 Ordering information: This item can be ordered from DOI: 10.1007/978-3-642-21777-7_10 Access Statistics for this chapter More chapters in Lecture Notes in Economics and Mathematical Systems from Springer |
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