A Recurrent Utility Function of Fictitious Generality

UC Davis Agricultural and Resource Economics Working Paper No. 99-005

11 Pages Posted: 29 Sep 2005

See all articles by Quirino Paris

Quirino Paris

University of California, Davis - Department of Agricultural and Resource Economics

Michael R. Caputo

University of Central Florida - College of Business Administration - Department of Economics

Date Written: 1999

Abstract

For the past twenty-five years, Dusansky and his associated co-authors have published a long series of papers which are based on the same price-dependent utility function. The alleged price dependence, however, is fictitious in the sense that the level of exogenous money income can replace the commodity prices. The consequence is that the demand functions derived from Dusansky's utility function are identical and observationally equivalent to the demand functions obtained from a prototypical utility function. Since all the market and environmental effects are revealed only through the demand functions, the specification and use of a utility function such as that used by Dusansky is irrelevant and uninformative for the analysis of any economic problem where prices enter the consumer utility function and whose goal is the detection of the effects of price-dependent preferences on the demand for real goods.

Keywords: Utility function, Price-dependent utility, Slutsky matrix

JEL Classification: D01

Suggested Citation

Paris, Quirino and Caputo, Michael R., A Recurrent Utility Function of Fictitious Generality (1999). UC Davis Agricultural and Resource Economics Working Paper No. 99-005, Available at SSRN: https://ssrn.com/abstract=807984 or http://dx.doi.org/10.2139/ssrn.807984

Quirino Paris (Contact Author)

University of California, Davis - Department of Agricultural and Resource Economics ( email )

One Shields Avenue
Davis, CA 95616
United States
530-752-1528 (Phone)
530-752-5614 (Fax)

Michael R. Caputo

University of Central Florida - College of Business Administration - Department of Economics ( email )

Orlando, FL 32816-1400
United States

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