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Income elasticity and international income differences
- Liao, Junmin, Wang, Wei
- Economics letters 2018 v.169 pp. 68-71
- income, income elasticities
- The constant relative income elasticity generated by non-homothetic CES preferences is consistent with cross-country empirical evidence. We show that non-homothetic CES preferences fit empirical patterns better than Stone–Geary preferences in a standard framework in the international income differences literature.