Language：English   Publishing type：Research paper (scientific journal)  

We generalize the Alchian-Allen theorem so as to account for income and endowment effects and provide two versions of a Generalized Alchian-Allen theorem: one for a unit cost component and one for a proportional cost component. Both versions provide a decomposition of an uncompensated change in the demand ratio of two goods into a substitution effect and an income-endowment effect-and may thus be regarded as extensions of the familiar Slutsky equation for relative demand. Finally, we apply our results to the choice of real estates and to parental time allocation decisions, the latter providing implications for child care policies.

DOI： 10.1111/ecin.12205

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Language：English   Publishing type：Research paper (scientific journal)  

We explore the implications of the generalised Alchian-Allen theorem for the labour-leisure-child-care decision of a mother with young children. In this framework we find: (i) For mothers who work only a few hours a week, a rise in wages arguably increases the demand for leisure relative to parental child care
(ii) given empirical evidence that an increase in wages induces mothers to spend less time on leisure and more with children, the generalised Alchian-Allen theorem implies that this requires the income elasticity of parental child care to be substantially higher than that of leisure. This finding, though, imposes substantial restrictions on reasonable specifications of a mother's utility function. © 2013 Elsevier B.V.

DOI： 10.1016/j.labeco.2013.03.004

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Language：English   Publishing type：Research paper (scientific journal)  

We explore the Alchian-Allen effect-that is, the effect of an absolutely equal increase in the price of two goods on their demand ratio-for conditional (. viz.short-run) and unconditional (. viz.long-run) demand functions. We show that the Alchian-Allen effect for unconditional demand equals its conditional counterpart (where the consumption level of a third good is held constant) if the two goods feature identical substitution elasticities with the third good. Remarkably, this result holds true for both Hicksian and Marshallian demand functions. © 2013 Elsevier B.V.

DOI： 10.1016/j.econlet.2013.06.017

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Language：English   Publishing type：Research paper (scientific journal)  

It is shown that a Walrasian price adjustment process fails to converge to an equilibrium in an exchange economy with three consumers and three commodities, where each consumer has a quasilinear utility function, desires only two commodities, and demands positive amounts of both commodities, The instability is due to weak substitution effects in addition to asymmetrical income effects.

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