The possibilities to apply the Slutsky decomposition model of aggregate price effect

The objective of the work is to present, analyze critically and illustrate the possibilities of implementing the decomposition model of price effects in the works of E. E. Slutsky, the known American economist. Starting from the author´s idea that the height of real consumer income is determined by the attainable quantity of goods along with available income and consumer use optimization, some decomposition models of aggregate price effect change are analyzed. It is about the Slutsky model of compensation income change and the model of income effect change. The work analyzes the possibility of implementation in the analysis of real consumer behavior when they make decision and choose the optimal consumer basket. The application of improved methodology for calculation the price change index and the consumer standard of living in time dynamics is considered, too.