In this book the foundations and applicability of the Generalized Fechner-Thurstone Utility Function are laid out. It is shown how by removing the constraint of fixed preferences in the neoclassical consumer theory, utility theory can be used to develop non-parametric indices along with elasticities of the marginal rates of substitutions. It is also shown that whereas the existence of a fixed preference utility function is not always guaranteed for different demand functions, there will always exist at least one Generalized Fechner-Thurstone Direct Utility Function. Furthermore, analysis using the Fechner-Thurstone Direct Utility Function is clear and simple and does not rely on ad hoc Taylor expansions. The construction of different true-cost-of-living indices, the comparison of North American consumers, and a habit formation model are developed to show the usefulness of the Generalized Fechner-Thurstone Direct Utility Function.
Authors and Affiliations
Department of Economics, SUNY Binghamton, Binghamton, USA
R. L. Basmann
Department of Economics, Southern Methodist University, Dallas, USA
D. J. Slottje,
K. Hayes
Department of Economics, University of Mississippi University, USA
J. D. Johnson
Department of Economics, University of North Texas, Denton, USA
D. J. Molina
Bibliographic Information
Book Title: The Generalized Fechner-Thurstone Direct Utility Function and Some of its Uses
Authors: R. L. Basmann, D. J. Slottje, K. Hayes, J. D. Johnson, D. J. Molina
