THE COST-OF-LIVING INDEX: COMBINATORIAL THEORY
Abstract
The evaluation is considered of the range for a cost-of-living index which is compatible with given expenditure data. The method for solution of the index-number problem gives the means of establishing the range of any characteristics of a normal preference scale admitted by given expenditure data; for example, an equilibrium on a balance constraint, an elasticity, properties such as substitutability, complementarity, decomposability, and so forth, with every concept which depends on preferences in consumer theory. It should be possible to give all such conceptsA PRECISE MEANING IN TERMS OF A FINITE SCHEME OF EXPENDITURE DATA. With that done, fitting instruments would be available for the empirical investigation of consumer behaviour, so far as that behaviour can be grasped systematically in direct terms of the classical framework. An empirical preference structure must be somewhat loosely characterized, in view of the fragmentary character of the empirical data. The present method seems entirely appropriate in that requirement since it precisely represents the very vagueness of preferences. (Author)
Document Details
- Document Type
- Technical Report
- Publication Date
- Apr 10, 1961
- Accession Number
- AD0256523
Entities
People
- S.n. Afriat
Organizations
- Princeton University