Testing the homogeneous marginal utility of income assumption KU Leuven
© 2016, Published with license by Taylor & Francis Group, LLC © Thomas Demuynck. We develop a test for the hypothesis that every agent from a population of heterogeneous consumers has the same marginal utility of income function. This homogeneous marginal utility of income (HMUI) assumption is often (implicitly) used in applied demand studies because it has nice aggregation properties and facilitates welfare analysis. If the HMUI ...