Sato's Insight on the Relationship between the Frisch 'Parameter' and the Average Elasticity of Substitution

This short note demonstrates that Sato's 1972 insight concerning the equivalence between Frisch's 'money flexibility' parameter and the average elasticity of substitution among commodities needs to be modified if it is to be applied to non-homothetic utility functions. Fortunately the modification is easily implemented.

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Year of publication:	1992-01
Authors:	Powell, Alan A.
Institutions:	Centre of Policy Studies and Impact Project (COPS), Victoria University

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Extent:	application/pdf text/html
Series:	Centre of Policy Studies/IMPACT Centre Working Papers.
Type of publication:	Book / Working Paper
Classification:	D12 - Consumer Economics: Empirical Analysis
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005001211