The Income Effect under Uncertainty: a Slutsky-Like Decomposition with Risk Aversion
Elena Antoniadou,
Leonard Mirman and
Marc Santugini
Cahiers de recherche from CIRPEE
Abstract:
We study the effect of changing income on optimal decisions in the multidimensional expected utility framework with strongly separable preferences. Using the Kihlstrom and Mirman (1974) (KM) utility representation, we show that the effect of changing income can be decomposed into a modified income effect linked to the classical income effect and an effect representing attitudes to risk, modified by income.
Keywords: Classical Demand Theory; Consumption-Saving Problem; Income; Risk Aversion; Uncertainty (search for similar items in EconPapers)
JEL-codes: D01 D81 D91 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-upt
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Journal Article: The income effect under uncertainty: A Slutsky-like decomposition with risk aversion (2016) 
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Persistent link: https://EconPapers.repec.org/RePEc:lvl:lacicr:1306
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