In this book the foundations and applicability of the Generalized Fechner-Thurstone Utility Function are laid out. It is shown how by removing the constraint of fixed preferences in the neoclassical consumer theory, utility theory can be used to develop non-parametric indices along with elasticities of the marginal rates of substitutions. It is also shown that whereas the existence of a fixed preference utility function is not always guaranteed for different demand functions, there will always exist at least one Generalized Fechner-Thurstone Direct Utility Function. Furthermore, analysis using the Fechner-Thurstone Direct Utility Function is clear and simple and does not rely on ad hoc Taylor expansions. The construction of different true-cost-of-living indices, the comparison of North American consumers, and a habit formation model are developed to show the usefulness of the Generalized Fechner-Thurstone Direct Utility Function.
1 Introduction.- 2 The GFT Utility Function.- 3 Estimating the GFT Form.- 4 The GFT and Alternative Forms.- 5 The True Cost-of-Living Concept.- 6 Cross Country Comparisons.- 7 Testing for Habit Persistence.- 8 Concluding Remarks.- A The Five Commodity Groups.- B The Eleven Commodity Groups.
Inhaltsverzeichnis
1 Introduction.- 2 The GFT Utility Function.- 3 Estimating the GFT Form.- 4 The GFT and Alternative Forms.- 5 The True Cost-of-Living Concept.- 6 Cross Country Comparisons.- 7 Testing for Habit Persistence.- 8 Concluding Remarks.- A The Five Commodity Groups.- B The Eleven Commodity Groups.
Klappentext
In this book the foundations and applicability of the Generalized Fechner-Thurstone Utility Function are laid out. It is shown how by removing the constraint of fixed preferences in the neoclassical consumer theory, utility theory can be used to develop non-parametric indices along with elasticities of the marginal rates of substitutions. It is also shown that whereas the existence of a fixed preference utility function is not always guaranteed for different demand functions, there will always exist at least one Generalized Fechner-Thurstone Direct Utility Function. Furthermore, analysis using the Fechner-Thurstone Direct Utility Function is clear and simple and does not rely on ad hoc Taylor expansions. The construction of different true-cost-of-living indices, the comparison of North American consumers, and a habit formation model are developed to show the usefulness of the Generalized Fechner-Thurstone Direct Utility Function.
