| Sumario: | Most economists would agree that past consumption patterns are an important determinant of present consumption patterns, and that one ought to distinguish between long-run and short-run demand functions. But although the distinction between long-run and short-run behavior is traditional in the theory of the firm, it is seldom made in the theory of consumer behavior. In this paper I formulate a model of consumer behavior based on habit formation, beginning with a specific class of demand functions derived from the "modified Bergson family" of utility functions. The properties of these utility functions and the corresponding demand functions are briefly summarized in Section 1. I then postulate that the parameters of these functions (and hence the corresponding demand functions) depend in a specific way on past consumption; I introduce a specific habit-formation hypothesis and consider the short-run properties of the implied system of dynamic demand functions in Section 2. In the following section the long-run properties Of the dynamic system are examined, and in Section 4 it is shown that the dynamic system is locally stable. In the concluding section I survey the literature on dynamic demand functions and consider several possible directions in which the model can be generalized.
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