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Preferences and Normal Goods: An Easy-to-Check Necessary and Sufficient Condition

Ennio Bilancini and Leonardo Boncinelli ()

Center for Economic Research (RECent) from University of Modena and Reggio E., Dept. of Economics "Marco Biagi"

Abstract: We provide a necessary and sufficient condition for goods to be normal when utility functions are differentiable and strongly quasi-concave. Our condition is equivalent to the condition proposed by Alarie et al. (1990), but it is easier to check: it only requires to compute the minors associated with the border column (or row) of the bordered Hessian matrix of the utility function.

Keywords: normal goods; bordered hessian (search for similar items in EconPapers)
JEL-codes: D11 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-upt
Date: 2010-02
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Journal Article: Preferences and normal goods: An easy-to-check necessary and sufficient condition (2010) Downloads
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