A cross-country analysis of consumption patterns
Kravis and others (1978) made a detailed analysis of the components of the per capita gross domestic products of 16 countries. In this article we use the consumption components of their study for 1970 with four distinct objectives in mind. First, we want to verify Frisch’s (1959: 189) conjecture according to which the income elasticity of the marginal utility of income takes negative values which increase algebraically toward zero as the consumer becomes more affluent. This conjecture was considered by several other authors, but the availability of consumption data for countries at quite different levels of affluence is a good reason for a reconsideration of this topic.
KeywordsMarginal Utility Real Income Income Elasticity Budget Share Differential Approach
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