Scandinavian Working Papers in Economics

Memorandum,
Oslo University, Department of Economics

No 32/2003: A Stochastic Model for the Utility of Income

John k: Dagsvik () and Steinar Strøm ()
Additional contact information
John k: Dagsvik: Statistics Norway, Postal: Kongens gate 6, Oslo, P.O.B 8131 Dep,, N-0033 Oslo
Steinar Strøm: Dept. of Economics, University of Oslo, Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway

Abstract: In this paper we propose a particular approach to measuring utility of income. To this end we develop a theoretical framework that restricts the class of admissible functional forms and distributions of the random components of the model. The theoretical approach is based on ideas and principles that are used in modern psychophysical research and theories of probabilistic choice.The empirical part of the paper is based on “Stated Preference” data (SPD). In the present context this means that individuals participating in a laboratory type of experiments are asked to rank order a set of hypothetical alternatives presented.

Keywords: Utility of income; Random utility; Invariance principles

JEL-codes: B21; D19

39 pages, October 3, 2003

Full text files 

Memo-32-2003.pdf PDF-file

Download statistics

Questions (including download problems) about the papers in this series should be directed to Mari Strønstad Øverås ()
Report other problems with accessing this service to Sune Karlsson ().

RePEc:hhs:osloec:2003_032This page generated on 2024-09-13 22:16:44.