Market Demand Elasticity and Income Inequality

Rustam Ibragimov and Marat Ibragimov

Scholarly Articles from Harvard University Department of Economics

Abstract: This paper deals with the analysis of the relation between aggregate demand for a consumption good and the distribution of income across consumers. We obtain sufficient conditions under which changes in income inequality lead to an increase or decrease in the market demand elasticities. The conditions are satisfied for individual demand functions commonly used in economic models, in particular, for the typical demand functions on luxury goods and necessities.

Date: 2007
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Citations: View citations in EconPapers (6)

Published in Economic Theory

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Journal Article: Market Demand Elasticity and Income Inequality (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:hrv:faseco:2623728

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