Slutsky substitution matrix is negative semidefinite

E746878

The Slutsky substitution matrix is negative semidefinite is a core result in consumer theory stating that, under standard assumptions, the matrix of compensated price effects has non-positive eigenvalues, reflecting the law of demand in a multigood setting.

All labels observed (4)

How this entity was disambiguated

Statements (42)

Predicate Object
instanceOf result in microeconomic theory ⓘ
theorem in consumer theory ⓘ
appliesTo finite-dimensional commodity spaces ⓘ
assumes convex preferences ⓘ
differentiable utility or demand functions ⓘ
locally non-satiated preferences ⓘ
standard consumer theory assumptions ⓘ
concerns Hicksian demand functions ⓘ
linked to: Hicksian demand

Slutsky substitution matrix ⓘ
compensated price effects ⓘ
connectedTo Afriat–Varian revealed preference conditions in differential form ⓘ
contrastsWith positive semidefinite matrices in production theory ⓘ
describes curvature property of the expenditure function ⓘ
equivalentTo Hicksian demand satisfies the law of compensated demand ⓘ
linked to: Hicksian demand

expenditure function is concave in prices ⓘ
field consumer theory ⓘ
microeconomics ⓘ
guarantees consistency of observed Hicksian demand with utility maximization ⓘ
historicalOrigin work of Eugen Slutsky on demand theory ⓘ
holdsUnder interior solutions to the consumer problem ⓘ
well-behaved preferences ⓘ
implies eigenvalues of the Slutsky substitution matrix are non-positive ⓘ
for any price change vector the associated quadratic form is non-positive ⓘ
law of demand in a multigood setting ⓘ
own-price compensated effects are non-positive ⓘ
substitution terms cannot generate positive quadratic forms ⓘ
isPropertyOf matrix of partial derivatives of Hicksian demand with respect to prices ⓘ
isSpecialCaseOf curvature restrictions in applied demand analysis ⓘ
logicalStatus necessary condition for rationalizable Hicksian demand ⓘ
not sufficient alone for full integrability ⓘ
mathematicalForm Slutsky matrix is symmetric and negative semidefinite ⓘ
motivates imposition of curvature constraints in econometric models of demand ⓘ
refersTo negative semidefiniteness of the Slutsky substitution matrix ⓘ
relatedTo Hicksian substitution effect ⓘ
linked to: Hicksian demand

Marshallian demand functions ⓘ
linked to: Marshallian demand

Slutsky equation ⓘ
integrability conditions for demand ⓘ
requires twice differentiable expenditure function ⓘ
testedIn empirical demand system estimation ⓘ
usedIn comparative statics of consumer demand ⓘ
duality theory in microeconomics ⓘ
welfare analysis ⓘ

How these facts were elicited

Referenced by (4)

Full triples — surface form annotated when it differs from this entity's canonical label.

Hicksian demand → implies → Slutsky substitution matrix is negative semidefinite ⓘ
Slutsky substitution matrix is negative semidefinite → concerns → Slutsky substitution matrix ⓘ
linked to: Slutsky substitution matrix is negative semidefinite
Slutsky substitution matrix is negative semidefinite → mathematicalForm → Slutsky matrix is symmetric and negative semidefinite ⓘ
linked to: Slutsky substitution matrix is negative semidefinite
Eugen Slutsky → hasConceptNamedAfter → Slutsky matrix ⓘ
linked to: Slutsky substitution matrix is negative semidefinite