Batley, RP and Ibanez, JN (2013) On the path independence conditions for discrete-continuous demand. Journal of Choice Modelling, 7. 2. 13 - 23. ISSN 1755-5345
Abstract
We consider the manner in which the well-established path independence conditions apply to Small and Rosen's (1981) problem of discrete-continuous demand, focussing especially upon the restricted case of discrete choice (probabilistic) demand. We note that the consumer surplus measure promoted by Small and Rosen, which is specific to the probabilistic demand, imposes path independence to price changes a priori. We find that path independence to income changes can further be imposed provided a numeraire good is available in the consumption set. We show that, for practical purposes, McFadden's (1981) ‘residual income' specification of the conditional indirect utility function offers an appropriate means of representing path independence to price and income changes.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | (c) 2013, Elsevier Ltd. All rights reserved. This is an author produced version of a paper published in Journal of Choice Modelling. Uploaded in accordance with the publisher's self-archiving policy |
Keywords: | Path independence; Discrete-continuous demand; Discrete choice; Consumer surplus; Residual income |
Dates: |
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Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Environment (Leeds) > Institute for Transport Studies (Leeds) > ITS: Economics and Discrete Choice (Leeds) |
Depositing User: | Symplectic Publications |
Date Deposited: | 12 Nov 2015 09:27 |
Last Modified: | 17 Jan 2018 07:39 |
Published Version: | http://dx.doi.org/10.1016/j.jocm.2013.04.011 |
Status: | Published |
Publisher: | Elsevier |
Identification Number: | 10.1016/j.jocm.2013.04.011 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:87552 |