The marginal utility of money : a modern Marshallian approach to consumer choice

We reformulate neoclassical consumer choice by focusing on γ, the marginal utility of money. As the opportunity cost of current expenditure, γ is approximated by the slope of the indirect utility function of the continuation. We argue that γ can largely supplant the role of an arbitrary budget constraint in partial equilibrium analysis. The result is a better grounded, more exible and more intuitive approach to consumer choice. -- budget constraint ; separability ; value for money