Title

Rationalizing and Curve-Fitting Demand Data with Quasilinear Utilities

Document Type

Discussion Paper

Publication Date

2-1-2003

CFDP Number

1399R

CFDP Revision Date

2004-07-01

CFDP Pages

11

Abstract

In the empirical and theoretical literature a consumer’s utility function is often assumed to be quasilinear. In this paper we provide necessary and sufficient conditions for testing if the consumer acts as if she is maximizing a quasilinear utility function over her budget set. If the consumer’s choices are inconsistent with maximizing a quasilinear utility function over her budget set, then we compute the “best” quasilinear rationalization of her choices.

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