Luxuries Are Easier to Postpone: A Proof

Martin Browning · Thomas F. Crossley

102 citations0/0 files storedJournal of Political Economy

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Economics of Agriculture and Food Markets Consumer Market Behavior and Pricing Economic theories and models

Abstract

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.

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