变动替代弹性效用函数理论进展及其应用

doi:10.3785/j.issn.1008-942X.CN33-6000/C.2024.07.221

Abstract
Figure/Table
References
Related Citation (0)

Download: PDF (726 KB) HTML (1 KB)
Export: BibTeX | EndNote (RIS)

Abstract Nowadays, Chinese economy enters into a new stage of high-quality development. Consumption plays an important supporting role of building a new development diagram. Previous studies have systematically explained the importance of consumption from the perspective of influencing factors at the macro level as well as its overall effects. However, there has been little research on heterogeneous consumption behaviors. In a long time period, researchers are inclined to use Constant Elasticity of Substitution (CES) utility function to describe consumers’ behaviors. Since it assumes that the elasticity of substitution between any two varieties is constant, an increase in a consumer’s consumption of one product does not affect his preference for other products, and thus the transformation and upgrading of the consumption caused by an increase in income can not be explored.In order to fill the inefficiency of CES utility function, foreign researchers revised the assumptions and proposed Variable Elasticity of Substitution (VES) utility function. Such utility functions can not only describe consumers’ preference of “love for variety”, but also reflect the variable mark-ups in equilibrium. The pro-competitive effect provides new ideas for analyzing resource allocation, welfare gains from trade, and structural transformation. Unfortunately, existing literature has not reached a consensus on establishing a unified analytical framework covering various types of VES utility functions. In terms of research methods, it is still mainly about developing different types of VES utility functions. Thus, understanding the characteristics and applications of mainstream VES utility functions not only provides a reference for expanding the discussion on VES utility functions from specific to broad contexts, but also lays the groundwork for future research in this area.Therefore, this paper firstly reviews the theoretical evolutions of the VES utility function. By comparing the mechanisms difference between the VES and the CES utility from consumer preference, firm behavior, and welfare analysis, it further generalizes the types and features of mainstream VES utility function. Then, this paper introduces the latest research and summarizes their results from the perspective of resource allocation, welfare gains from trade, and structural transformation. In addition, this paper returns to the research question of consumption and discusses the advantages of using VES utility functions in terms of its income effect and pro-competitive effect to analyze consumption upgrading and diversification. Finally, this paper prospects the directions for future research: establishing a multi-regional and multi-sectoral research framework with VES utility functions to explore the impacts of new types of consumption such as green consumption; building a dynamic framework to study consumption behavior and explore the mechanism of variable elasticity of substitution in a long-term session.The innovation of this paper involves the following two aspects on the one hand, this paper collects and summarizes the viewpoints of VES utility function and points out its theoretical evolution progress and research question expansions; on the other hand, considering the decision: “accelerating the development of a complete system of domestic demand and improving the long-term mechanism for expanding consumption”, this paper analyzes the advantages of using VES utility functions to investigate the upgrading and diversification of consumption, which further provides theoretical insights for exploring such research questions as consumption inequality.

Key words： VES utility function pro-competitive effect income effect boost consumption

Received: 22 July 2024

	Service

	E-mail this article
	Add to my bookshelf
	Add to citation manager
	E-mail Alert
	RSS
	Articles by authors
	Wang Congcong
	Zeng Daozhi
	Zhu Xiwei

Cite this article:

Wang Congcong,Zeng Daozhi,Zhu Xiwei. Variable Elasticity of Substitution Utility Function: Literature Review and Its Application[J]. JOURNAL OF ZHEJIANG UNIVERSITY, 2025, 55(12): 138-148.

URL:

https://www.zjujournals.com/soc/EN/10.3785/j.issn.1008-942X.CN33-6000/C.2024.07.221 OR https://www.zjujournals.com/soc/EN/Y2025/V55/I12/138

1 陈彦斌：《形成双循环新发展格局关键在于提升居民消费与有效投资》，《经济评论》2020年第6期，第11-15页。
2 依绍华：《新发展格局下我国居民消费发展态势与促进策略》，《改革》2021年第12期，第94-105页。
3 洪银兴、韩绿艺：《从发展消费经济入手构建新发展格局》，《湘潭大学学报（哲学社会科学版）》2023年第1期，第25-29页。
4 李慧：《畅通国内大循环：增强消费对经济发展的基础性作用》，《江苏社会科学》2024年第4期，第121-129页。
5 顾晓燕、薛平平：《知识产权贸易、消费升级与“双循环”有效联动》，《东岳论丛》2023年第10期，第154-160页。
6 Zhao D.， Wu T. & He Q.， “Consumption inequality and its evolution in urban China，” China Economic Review， Vol. 46 （2017）， pp. 208-228.
7 费舒澜、李实：《新发展格局下流动人口消费不平等的趋势与成因》，《财经论丛》2024年第9期，第14-24页。
8 毛海涛、钱学锋、张洁：《企业异质性，贸易自由化与市场扭曲》，《经济研究》2018年第2期，第170-184页。
9 颜色、郭凯明、杭静：《需求结构变迁、产业结构转型和生产率提高》，《经济研究》2018年第12期，第83-96页。
10 Wang C.， Zeng D. Z. & Zhu X.， “The core-periphery model under additively separable preferences，” Journal of Regional Science， Vol. 65， No. 2 （2025）， pp. 378-402.
11 Zhelobodko E.， Kokovin S. & Parenti M. et al.， “Monopolistic competition： beyond the constant elasticity of substitution，” Econometrica， Vol. 80， No. 6 （2012）， pp. 2765-2784.
12 Dhingra S. & Morrow J.， “Monopolistic competition and optimum product diversity under firm heterogeneity，” Journal of Political Economy， Vol. 127， No. 1 （2019）， pp. 196-232.
13 Dixit A. K. & Stiglitz J. E.， “Monopolistic competition and optimum product diversity，” American Economic Review， Vol. 67， No. 3 （1977）， pp. 297-308.
14 Feenstra R. C. & Weinstein D. E.， “Globalization， markups， and US welfare，” Journal of Political Economy， Vol. 125， No. 4 （2017）， pp. 1040-1074.
15 Ottaviano G. I. P.， Tabuchi T. & Thisse J. F.， “Agglomeration and trade revisited，” International Economic Review， Vol. 43， No. 2 （2002）， pp. 409-435.
16 Foellmi R.， Hepenstrick C. & Josef Z.， “International arbitrage and the extensive margin of trade between rich and poor countries，” Review of Economic Studies， Vol. 85， No. 1 （2018）， pp. 475-510.
17 Lin K. & Zeng D. Z.， “International trade with binary preferences and heterogeneous productivity，” Economic Modelling， Vol. 122 （2023）， https：//doi.org/10.1016/j.econmod.2023.106236.
18 Matsuyama K. & Ushchev P.， “Beyond CES： three alternative classes of flexible homothetic demand systems，” https：//cepr.org/publications/dp12210， 2017-08-07.
19 Mrázová M. & Neary J. P.， “Not so demanding： demand structure and firm behavior，” American Economic Review，Vol. 107， No. 12 （2017）， pp. 3835-3874.
20 Bagwell K. & Lee S. H.， “Monopolistic competition and efficiency under firm heterogeneity and non-additive preferences，” American Economic Journal： Microeconomics， Vol. 15， No. 4 （2023）， pp. 208-267.
21 Behrens K.， Mion G. & Murata Y. et al.， “Quantifying the gap between equilibrium and optimum under monopolistic competition，” Quarterly Journal of Economics， Vol. 135， No. 4 （2020）， pp. 2299-2360.
22 Nocco A.， Ottaviano G. I. P. & Salto M.， “Monopolistic competition and optimum product selection，” American Economic Review， Vol. 104， No. 5 （2014）， pp. 304-309.
23 Edmond C.， Midrigan V. & Xu D.， “How costly are markups？” Journal of Political Economy， Vol. 131， No. 7 （2023）， pp. 1619-1675.
24 尹恒、张子尧：《产品市场扭曲与资源配置效率：异质性企业加成率视角》，《经济研究》2021年第11期，第119-137页。
25 钱学锋、裴婷：《从供给到需求：贸易理论研究的新转向》，《世界经济》2022年第8期，第3-29页。
26 Kokovin S.， Molchanov P. & Bykadorov I.， “Increasing returns，monopolistic competition， and international trade： revisiting gains from trade，” Journal of International Economics， Vol. 137 （2022）， http：//doi.org/10.1016/j.jinteco.2022.103595.
27 Arkolakis C.， Costinot A. & Rodríguez-Clare A.， “New trade models， same old gains？” American Economic Review， Vol. 102， No. 1 （2012）， pp. 94-130.
28 Behrens K. & Murata Y.， “Trade， competition， and efficiency，” Journal of International Economics， Vol. 87， No. 1 （2012）， pp. 1-17.
29 Behrens K.， Mion G. & Murata Y. et al.， “Trade， wages， and productivity，” International Economic Review， Vol. 55， No. 4 （2014）， pp. 1305-1348.
30 Mrázová M. & Neary J. P.， “Together at last： trade costs， demand structure， and welfare，” American Economic Review， Vol. 104， No. 5 （2014）， pp. 298-303.
31 Arkolakis C.， Costinot A. & Donaldson D. et al.， “The elusive pro-competitive effects of trade，” Review of Economic Studies， Vol. 86， No. 1 （2019）， pp. 46-80.
32 Behrens K. & Murata Y.， “Globalization and individual gains from trade，” Journal of Monetary Economics， Vol. 59， No. 8 （2012b）， pp. 703-720.
33 钱学锋、李莹、王备：《消费者异质性、中间品贸易自由化与个体福利分配》，《经济学（季刊）》2021年第5期，第1661-1690页。
34 王弟海、李夏伟、龚六堂：《经济增长与结构变迁研究进展》，《经济学动态》2021年第1期，第125-142页。
35 Murata Y.， “Engel’s law， Petty’s law， and agglomeration，” Journal of Development Economics，Vol. 87， No. 1 （2008）， pp. 161-177.
36 Comin D.， Lashkari D. & Mestieri M.， “Structural change with long-run income and price effects，” Econometrica， Vol. 89， No. 1 （2021）， pp. 311-374.
37 Fieler A.， “Non-homotheticity and bilateral trade： evidence and a quantitative explanation，” Econometrica， Vol. 79， No. 4 （2011）， pp. 1069-1101.
38 Markusen J.， “Putting per-capita income back into trade theory，” Journal of International Economics， Vol. 90， No. 2 （2013）， pp. 255-265.
39 元惠连、夏庆杰、王志伟：《中国城镇居民消费需求分析》，《经济科学》2016年第4期，第54-64页。
40 易行健、朱力维、杨碧云：《城乡居民不同来源收入对其消费行为的影响——基于2002—2013年省级面板数据的实证检验》，《产业经济评论》2018年第5期，第103-113页。