The Information Approach to Demand Analysis

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


This article approaches demand analysis in a probabilistic manner. The main ingredient is the value share (the proportion of total expenditure spent on a particular commodity), which can be regarded as a probability in view of the fact that it is nonnegative and adds up to one when summed over all commodities. This ingredient is used for the formulation of price and quantity index numbers and demand equations, partly in the light of information theory.


Utility Function Price Index Marginal Utility Real Income Income Elasticity 
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Copyright information

© Springer Science+Business Media Dordrecht 1992

Authors and Affiliations

  1. 1.Netherlands School of EconomicsRotterdamThe Netherlands

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