The Independence Transformation under Almost Additivity

Part of the Advanced Studies in Theoretical and Applied Econometrics book series (ASTA, volume 25)


When the consumer’s tastes are close to preference independence, each transformed good is uniquely associated with one observed good. The off-diagonal elements of the composition matrix of the transformation are equal apart from sign and are inversely proportional to the difference between the income elasticities of the corresponding observed goods.


Marginal Utility Income Elasticity Composition Matrix Economic Letter Budget Share 
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Copyright information

© Springer Science+Business Media Dordrecht 1992

Authors and Affiliations

  1. 1.University of ChicagoChicagoUSA

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