A simple allocation model is developed in which response is assumed to be linear in the logs of the control variables. It is then shown that the optimal allocation of a fixed total resource is proportional to the partial regression weights when the linear-in-logs model is fitted by least squares. The model is tested on subjects’ preferences for alternative allocations of leisure time. Possible applications of the model to general allocation problems are also discussed.
Get full access to this article
View all access options for this article.
References
1.
ArrowK.J., and HurwiczL. (1956), “Reduction of Constrained Maxima to Saddle-Point Problems,”Proceedings of the Third Berkeley Symposium on Mathematical Statistics and Probability, NeymanJ., ed. Berkeley, CA: University of California Press, 1–20.
2.
CarrollJ.D. (1972), “Individual Differences and Multidimensional Scaling,” in Multidimensional Scaling: Theory and Applications in the Behavioral Sciences, Vol. 1, ShephardR.N., RomneyA.K., and NerloveS.B., eds., New York: Seminar Press, 105–155.
3.
GreenP.E. (1974), “On Design of Choice Experiments Involving Multifactor Alternatives,”Journal of Consumer Research, 1, (September), 61–68.
4.
GreenP.E., and RaoV.R. (1971), “Conjoint Measurement for Quantifying Judgmental Data,”Journal of Marketing Research, 8, (August), 355–363.
5.
KoopmanB.O. (1952), “The Optimum Distribution of Effort.”Journal of Operations Research, 1, 54–63.
6.
LussHanan, and GuptaS.K., (1975), “Allocation of Effort Resources Among Competing Activities,”Journal of Operations Research, 23, (March-April), 360–366.
