Is utility additive? The case of alcohol

C-Tier
Journal: Applied Economics
Year: 1997
Volume: 29
Issue: 9
Pages: 1163-1167

Authors (3)

Kenneth Clements (University of Western Australi...) Wana Yang (not in RePEc) Simon Zheng (not in RePEc)

Score contribution per author:

0.336 = (α=2.02 / 3 authors) × 0.5x C-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

The hypothesis of additive utility (or preference independence) is often applied to the demand for broad aggregates. Recent testing provides some evidence favourable to the hypothesis, thus overturning the older results based on the standard asymptotic tests which are seriously biased against the null in small samples. Using data for seven countries and a variety of tests, this paper shows that preference independence also cannot be rejected for more narrowly defined commodities - beer, wine and spirits. The implications of the results for efficient taxation of alcoholic beverages are also explored.

Technical Details

RePEc Handle
repec:taf:applec:v:29:y:1997:i:9:p:1163-1167
Journal Field
General
Author Count
3
Added to Database
2026-01-25