EVIDENCE ON THE SLUTSKY CONDITIONS FOR DEMAND EQUATIONS

Abstract

T HE MODERN theory of consumer demand has been in the core of economic theory from its very beginning around the 1870's. Somewhat earlier (1857) Engel [6] published his study for the Kingdom of Saxony, which marks the start of systematic measurement of consumer behaviour. Both theory and measurement have developed enormously since their beginnings. Remarkably enough, the links between these two branches of study of consumer demand have remained rather weak. Nobody will deny the importance of those classics on theory and measurement of consumer demand as the monumental monographs by Schultz [15], Wold [22] and Stone [17], but even there the relation between the exposition of the theory and the derivation of the empirical results is frequently superficial. In this connection we can quote Cramer [4]: