The Generalized Fechner-Thurstone Direct Utility Function and Some of its Uses

by R.L. Basmann, D.J. Slottje, K. Hayes, J.D. Johnson, D.J. Molina

Overview

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.

Product Details

ISBN-13:	9780387968537
Publisher:	Springer New York
Publication date:	12/06/1988
Series:	Lecture Notes in Economics and Mathematical Systems , #316
Edition description:	1988
Pages:	159
Product dimensions:	5.83(w) x 8.27(h) x 0.01(d)

Table of Contents

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.