A Stochastic Model for the Utility of Income
Steinar Strøm and
Zhiyang Jia ()
Discussion Papers from Statistics Norway, Research Department
In this paper we propose a particular approach to measuring utility of income. To this end we develop a theoretical framework that restricts the class of admissible functional forms and distributions of the random components of the model. The theoretical approach is based on ideas and principles that are used in modern psychophysical research and theories of probabilistic choice. The empirical part of the paper is based on "Stated Preference" data (SPD). In the present context this means that individuals participating in a laboratory type of experiments are asked to rank order a set of hypothetical alternatives presented.
Keywords: Utility of income; Random utility; Invariance principles. (search for similar items in EconPapers)
JEL-codes: B21 D19 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dcm
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Working Paper: A Stochastic Model for the Utility of Income (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:ssb:dispap:358
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