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Discrepancy between Hicksian and Slutsky Decomposition

  1. Oct 6, 2014 #1
    I have drawn such a graph, but the two different methods of decomposition under a negative price change of commodity X have revealed two different natures of commodity X - the Slutsky decomposition concludes that X is normal, while the Hicksian decomposition yields the opposite conclusion. Is there anything that I have done wrong, or if my graph is fine, what would be the correct interpretation of it?

    Thanks a lot for helping.

    Screen Shot 2014-10-07 at 12.01.05 pm.png
  2. jcsd
  3. Oct 12, 2014 #2
    Thanks for the post! Sorry you aren't generating responses at the moment. Do you have any further information, come to any new conclusions or is it possible to reword the post?
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