Re: Endowment income effect

Posted by Rajat on Apr 21, 2015; 4:34am
URL: http://discussion-forum.276.s1.nabble.com/Endowment-income-effect-tp7596266p7596267.html

Put another way, my basic doubt is ..
Once i have entered a market and made my buying/selling choices, i go to a new set say X from W (my initial endowment set) .. After this, whatever changes happen in the market prices, the only effects that remain are purely substitution and income effect . There is no endowment with me now.. Then where does the question of endowment income effect arise ?
Once i have made my choices and reached set X, it is as good as having started with endowment-equivalent-amount of money and having reached set X