Subsistence and substitutability in consumer preferences

Research output: Working paperWorking papers

Authors

We propose a new three-step model-selection framework for size distributions
in empirical data. It generalizes a recent frequentist plausibility-of-t analysis
We propose a formal description of individual preferences that captures a
subsistence requirement in consumption in an otherwise standard constant-elasticity-ofsubstitution (CES) utility specification. We study how substitutability between the subsistence good and another good depends on the subsistence requirement and the level of consumption of the two goods. We find that the Hicksian elasticity of substitution is zero below the subsistence consumption level, and approaches the standard non-subsistence CES value as consumption of the subsistence good goes to infinity. Above the subsistence threshold, it strictly monotonically increases with income. Whether the two goods are market substitutes or complements depends on, besides the CES-substitutability parameter, the level of income and the subsistence requirement. Our result that with a subsistence requirement substitutability between different consumption goods is nonconstant but increases with individual income has important implications for growth, development and environmental policy.
Original languageEnglish
Place of PublicationLüneburg
PublisherInstitut für Volkswirtschaftslehre der Universität Lüneburg
Number of pages28
Publication statusPublished - 12.2013

    Research areas

  • Economics - Sustainability Economics, subsistence in consumption, substitutability, Hicksian elasticity of substitution, Stone-Geary function

Documents

Recently viewed

Researchers

  1. Andreas Bernard

Activities

  1. Biodiversity and ecosystem functions in the public - views, misconceptions and misunderstandings
  2. Bauhaus-Universität Weimar
  3. From Left to Right: Shifts in Political Hegemony Against the Backdrop of Structural Transformations of Capitalism and Class Composition
  4. Ansys High Frequency Simulation Conference - AHFSC 2013
  5. Context-based discrimination in school discipline
  6. Performance under Climatic Conditions
  7. Computational Methodologies and the study of art history, visual culture and material culture. A brief Introduction
  8. Advances in large scale production of mircoalgae and mussels (Mytilus edulis)
  9. International Conference on Systems, Control and Informatics - SCI 2013
  10. Representation as “experiencing for”? Exposure as a political argument
  11. Undoing the Demos?
  12. Journal für Mathematik-Didaktik (Zeitschrift)
  13. Sanjeeva Balasuriya
  14. Electronics (Zeitschrift)
  15. Vortrag: Exploring the Role of the History of Science in the Anthropocene
  16. Playing guitar while playing video games: An experiment with students learning to play the guitar by playing Rocksmith
  17. (Hi)Stories in Art after the End of the Cold War
  18. Istron-Tagung 2008
  19. European Academy of Management (Externe Organisation)
  20. Digital Leadership
  21. Ull Hohn
  22. Changes in Health Tourism in Europe
  23. Deleuze reads Foucault
  24. 4th International Conference on Indicators and Concepts of Innovation - 2010
  25. HOW? Questions of methodology, intentionality, and situatedness in research as a (critical) praxis
  26. Successes and failures of farm diversification processes – some evidence from two Polish regions

Publications

  1. Probing turbulent superstructures in Rayleigh-Bénard convection by Lagrangian trajectory clusters
  2. Digital Seriality as Structure and Process
  3. Development of a robust classifier of freshwater residence in barramundi (Lates calcarifer) life histories using elemental ratios in scales and boosted regression trees
  4. Narrative dialogic reading with wordless picture books
  5. Extrusion Benchmark 2009 – A Step Ahead in Virtual Process Optimization
  6. How to assess transformative performance towards sustainable development in higher education institutions
  7. Introduction: The representative turn in EU Studies
  8. Learning linear classifiers sensitive to example dependent and noisy costs
  9. Swarm Robotics, or: the smartness of 'a bunch of cheap dumb things'
  10. Repeated sampling detects gene flow in a flightless ground beetle in a fragmented landscape
  11. Digital language teaching after COVID-19: what can we learn from the crisis?
  12. Credit constraints and exports: A survey of empirical studies using firm level data
  13. The Role of Public Participation in Managing Uncertainty in the Implementation of the Water Framework Directive
  14. A Soft Alignment Model for Bug Deduplication
  15. Model-based estimation of pesticides and transformation products and their export pathways in a headwater catchment
  16. A Hybrid Hydraulic Piezo Actuator for Camless Internal Combustion Engines Controlled with an MPC and an Affine Feedforward Structure
  17. A Method to Enhance the Accuracy of Time of Flight Measurement Systems
  18. Developing robust field survey protocols in landscape ecology
  19. Assessing Effects Through Laboratory Toxicity Testing
  20. New and Rapid Fully Automated Method for Determination of Tazobactam and Piperacillin in Fatty Tissue and Serum by Column-Switching Liquid Chromatography