This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. Find sources: "Hicksian demand function" – news · newspapers · books · scholar · JSTOR(February 2018) (Learn how and when to remove this message)
In microeconomics, a consumer's Hicksian demand function or compensated demand function for a good is their quantity demanded as part of the solution to minimizing their expenditure on all goods while delivering a fixed level of utility. Essentially, a Hicksian demand function shows how an economic agent would react to the change in the price of a good, if the agent's income was compensated to guarantee the agent the same utility previous to the change in the price of the good—the agent will remain on the same indifference curve before and after the change in the price of the good. The function is named after John Hicks.
Mathematically,[1]
.
where h(p,u) is the Hicksian demand function, or commodity bundle demanded, at price vector p and utility level . Here p is a vector of prices, and x is a vector of quantities demanded, so the sum of all pixi is total expenditure on all goods. (Note that if there is more than one vector of quantities that minimizes expenditure for the given utility, we have a Hicksian demand correspondence rather than a function.)
Hicksian demand functions are useful for isolating the effect of relative prices on quantities demanded of goods, in contrast to Marshallian demand functions, which combine that with the effect of the real income of the consumer being reduced by a price increase, as explained below.
^Jonathan Levin; Paul Milgrom. "Consumer Theory" (PDF). p. 12.
and 19 Related for: Hicksian demand function information
microeconomics, a consumer's Hicksiandemandfunction or compensated demandfunction for a good is their quantity demanded as part of the solution to minimizing...
the fall in their real income, unlike in the Hicksiandemandfunction. Thus the change in quantity demanded is a combination of a substitution effect and...
demand equation and solve for P. Hicksiandemandfunction Marshallian demandfunction Excess demandfunction Supply and demandDemand Law of demand Profit...
answered by the Hicksiandemandfunction. Formally, the expenditure function is defined as follows. Suppose the consumer has a utility function u {\displaystyle...
general-equilibrium and value theory. The compensated demandfunction is named the Hicksiandemandfunction in memory of him. In 1972 he received the Nobel...
A demand curve is a graph depicting the inverse demandfunction, a relationship between the price of a certain commodity (the y-axis) and the quantity...
function, in contrast, assumes that the consumer has derived his demandfunctions optimally for given prices and income. Gorman polar form Hicksian demand...
Slutsky, relates changes in Marshallian (uncompensated) demand to changes in Hicksian (compensated) demand, which is known as such since it compensates to maintain...
of thought or theory that contrasts with mainstream economics. Hicksiandemandfunction hiding hand principle Hindu rate of growth Hirschman cycle historical...
the consumers' indirect utility function and h ( p , u ) {\displaystyle h(p,u)} is the consumers' hicksiandemandfunction. Fix a utility level u 0 = v (...
theory" University of Oxford University of Oxford IS–LM model, Hicksiandemandfunction, substitution effect, income effect, Kaldor–Hicks efficiency Kenneth...
13(4), [8] pp. 277-292. R. M. Solow (1984). "Mr Hicks and the Classics," Oxford Economic Papers, N.S., 36(198), [9] pp. 13–25. Hicksiandemandfunction...
utility function and Marshallian demand in the utility maximisation problem mirrors the relationship between the expenditure function and Hicksiandemand in...
describes the relationship between the Hicksian and Marshallian demands. Also shows the response of Marshallian demand to price changes. Preferences are supposed...
huge impact on the economy. The Hicksian (per John Hicks) and the Marshallian (per Alfred Marshall) demandfunction differ about deadweight loss. After...
Lionel W. McKenzie (Walrasian theory), Kenneth Arrow and Gérard Debreu (Hicksian theory) in the 1950s. Broadly speaking, general equilibrium tries to give...
Metcalfe, Ian Steedman, and Lynn Mainwaring have demonstrated), of the Hicksian neutrality of technical progress concept (as Steedman has shown), of neoclassical...
Zamagni, Stefano; Scazzieri, Roberto (2008). Markets, money and capital: Hicksian economics for the twenty-first century. Cambridge, UK New York: Cambridge...
Global Information
