A Comparative Analysis of the Effectiveness of Ceteris Paribus Assumption in Economic Models

Authors

  • Weeraratne N.C.  Department of Economics and Statistics, SUSL, BelihulOya, Sri Lanka

Keywords:

Ceteris Paribus, Correlation, Demand Function

Abstract

In general, an economist uses Ceteris Paribus assumption to explain the law of demand. Ceteris Paribus is Latin phrase and that generally used for saying “with other things being same or all other things remaining equal”. But this assumption is not valid for every case in the law of demand. So this paper explains how to use Ceteris Paribus assumption effectively. When the pairwise correlation between contributing factors of demand (price, income, …, etc.) is comparatively low , Ceteris Paribus assumption can use to yield a substantive isolation.

References

  1. Boutilier et al., 2003] C. Boutilier, R. Brafman, C. Domshlak, H. Hoos, and D. Poole. CP-nets: A tool for representing and reasoning with conditional ceteris paribus preference statements. Journal of AI Research, 2003.
  2. Cartwright, Nancy. 2001. Ceteris paribus laws and socio-economic machines. In The economic world view: studies in the ontology of economics, ed. Uskali Mäki. Cambridge (UK): Cambridge University Press, 275-292.
  3. Doyle, J., & Wellman, M. P. (1994). Representing preferences as ceteris paribus comparatives. In Decision-theoretic planning: Papers from the 1994 Spring AAAI Symposium, AAAI Press, Menlo Park (pp. 69–75).
  4. Earman, J., J. Roberts, and S. Smith, forthcoming “‘Ceteris Paribus’ Lost”, in a special Erkenntnis volume on ceteris paribus laws.
  5. Niiniluoto, Ilkka. 1990. Theories, approximations, and idealizations. In Idealization I: general problems, eds. Jerzy Brzezi?ski, Francesco Coniglione, Theo A. F. Kuipers, and Leszek Nowak. Poznan Studies in the Philosophy of the Sciences and the Humanities, 16: 9-57.
  6. Niiniluoto, Illka. 2002. Truthlikeness and economic theories. In Fact and fiction in economics: models, realism, and social construction, ed. Uskali Mäki. Cambridge (UK): Cambridge University Press, 214-228.
  7. Persky, J., Retrospectives: Ceteris Paribus, Journal of Economic Perspectives, vol. 4, no. 2, 1990, pp. 187-193.
  8. Pietroski, Paul, and Georges Rey. 1995. When other things aren’t equal: saving ceteris paribus laws from vacuity. British Journal of the Philosophy of Science, 46 (1): 81-110.
  9. Schlicht, Ekkehart. 1985. Isolation and Aggregation in Economics, Germany: Springer-Verlag Publisher
  10. Simon, H., The Architecture of Complexity, Proceedings of the American Philosophical Society, vol. 106, no. 6, 1962, pp. 467-482. Stam, E., A Process Model of Locational Change: Implications for an Evolutionary Economic Geography, Applied Evolutionary Economics and the Knowledge-based Economy (A. Pyka and H. Hanusch, eds.), Edward Elgar, Cheltenham, 2006, pp. 143-165.

International Journal of Scientific Research in Science, Engineering and Technology

Downloads

Published

2016-08-30

Issue

Volume 2, Issue 4, July-August-2016

Section

Research Articles

License

Copyright (c) IJSRSET

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

How to Cite

[1]
Weeraratne N.C., " A Comparative Analysis of the Effectiveness of Ceteris Paribus Assumption in Economic Models, International Journal of Scientific Research in Science, Engineering and Technology(IJSRSET), Print ISSN : 2395-1990, Online ISSN : 2394-4099, Volume 2, Issue 4, pp.506-509, July-August-2016.