Luxuries are Easier to Postpone: A Proof

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We show that (Marshallian) income elasticities are proportional to (Frisch) own price elasticities if all goods are additively separable. This implies that luxuries are likely to be easier to postpone. It also implies that preferences over "consumption" are unlikely to display a constant elasticity of substitution
Original languageEnglish
JournalJournal of Political Economy
Issue number5
Pages (from-to)1022-1026
Publication statusPublished - 2000

ID: 148789