link Marshallian Demand and Hicksian Demand

EC423_Labour

We know that the Hicksian Demand is the minimum value function:

$$e(p,u)=\underset{x}{\min }p\cdot x\text{s.t.}u(x)>u$$

Note that we could not really observe Hicksian Demand, because in applied research, the utility is unmeasurable. Such that we could use Slutsky Equation to solve this problem.