The name is absent



above, conditions (5-i) and (5-iii) indicates that the MS functions are nonhomothetic. In
other words, an expansion path, a locus which links the points that give the same slope of
indifference curve in
σ - μ axis, is nonlinear. Then, examining the curvature of the
expansion path reveals the difference between conditions (5-i) and (5-iii). Formally,
consider an expansion path,
S = -Vσ (σ, μ)Vμ (σ, μ), where S denotes an arbitral slope of
indifference curve. Total differentiation of
S yields

dи        -V (σ, μ) V, (σ, μ) + V (σ, μ) V (σ, μ)    , . ,                ,    ,       „ ,

— =--;————σ----;—ʌ μ r—ʌ, which expresses the slope of the expansion

dσ S     -Vμσ (σ, μ) Vμ , μ)+ V , P) Vμμ , P)

path. In the case of DRRA, this is less than μ because of conditions (4-i) and (5-i). And in
σ

the case of IRRA and DARA, this is more than μ because of conditions (4-i) and (5-iii).

σ

Then, differentiating these relationships,


dμμ  dμμ

< and , derive,
dσ s σ     dσ s σ

d2μ
dσ2


)1 d2 μ       1 ( d μ      μ ^             ...     ,..                1     1

and —y > — — - — , respectively. These mean that the expansion
dσ s   σ ( dσ s   σ J

path is strictly concave in the case of DRRA and strictly convex in the case of IRRA and
DARA. Conversely, condition (4-i) and the strict concavity of expansion path derive
condition (5-i) while condition (4-i) and the strict convexity of expansion path derive
condition (5-iii). Therefore, conditions (5-i) and (5-iii) are replaced by each property of
expansion path. If it is possible to modify MS function displaying CRRA in such a way that
each property of the curvature of expansion path is satisfied with the remaining conditions
(1), (2), (3-i), (3-ii), (3-iii) and (4-i), then the objective here is achieved. A successful
example of the modification is obtained in the case of IRRA and DARA. Form (10) is
modified by introducing a new parameter as follows.

18



More intriguing information

1. TWENTY-FIVE YEARS OF RESEARCH ON WOMEN FARMERS IN AFRICA: LESSONS AND IMPLICATIONS FOR AGRICULTURAL RESEARCH INSTITUTIONS; WITH AN ANNOTATED BIBLIOGRAPHY
2. Psychological Aspects of Market Crashes
3. How to do things without words: Infants, utterance-activity and distributed cognition.
4. Towards Teaching a Robot to Count Objects
5. The name is absent
6. The name is absent
7. The Shepherd Sinfonia
8. The name is absent
9. The name is absent
10. Regional dynamics in mountain areas and the need for integrated policies