We provide a necessary and sufficient condition for goods to be normal when utility functions are differentiable and strongly quasi-concave. Our condition is equivalent to the condition proposed by Alarie et al. (1990), but it is easier to check: it only requires to compute the minors associated with the border column (or row) of the bordered Hessian matrix of the utility function.
Bilancini, E. e L., Boncinelli. "Preferences and Normal Goods: An Easy-to-CheckNecessary and Sufficient Condition" Working paper, RECENT WORKING PAPER SERIES, Dipartimento di Economia Marco Biagi – Università di Modena e Reggio Emilia, 2010.
Preferences and Normal Goods: An Easy-to-Check Necessary and Sufficient Condition
Bilancini, E.;
2010
Abstract
We provide a necessary and sufficient condition for goods to be normal when utility functions are differentiable and strongly quasi-concave. Our condition is equivalent to the condition proposed by Alarie et al. (1990), but it is easier to check: it only requires to compute the minors associated with the border column (or row) of the bordered Hessian matrix of the utility function.
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