Nota sobre el significado económico de la ecuación de Pareto

Abstract

The purpose of this note is to provide an economic interpretation of Pareto's equation given in this Manual and to point out some qualitative properties of the terms in which we can split it up. Particularly I show that the total effect of a change in a price pj on the demand of any good xj can be broken up into two parts called residual effect and Marshall effect. I give a geometric interpretation of these terms and I analyze, finally, some qualitative properties of the latter effect.