Budget share: Difference between revisions
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<math>\frac{\mbox{Real expenditure on the commodity}}{\mbox{Real income of the economic actor}}</math> | <math>\frac{\mbox{Real expenditure on the commodity}}{\mbox{Real income of the economic actor}}</math> | ||
If we assume no saving for or borrowing against the future, then the budget shares for all goods should be nonnegative real numbers | If we assume no saving for or borrowing against the future, then the budget shares for all goods should be nonnegative real numbers that add up to 1. | ||
Latest revision as of 20:03, 4 September 2013
Definition
The budget share of an individual, household, or other economic actor on a good, service, or commodity is defined as the quotient:
If we assume no saving for or borrowing against the future, then the budget shares for all goods should be nonnegative real numbers that add up to 1.