In microeconomics, the Slutsky equation (or Slutsky identity), named after Eugen Slutsky, relates changes in Marshallian (uncompensated) demand to changes in Hicksian (compensated) demand, which is known as such since it compensates to maintain a fixed level of utility. There are two parts of the Slutsky equation, namely the substitution effect and income effect.
In microeconomics, the Slutsky equation (or Slutsky identity), named after Eugen Slutsky, relates changes in Marshallian (uncompensated) demand to changes in Hicksian (compensated) demand, which is known as such since it compensates to maintain a fixed level of utility. There are two parts of the Slutsky equation, namely the substitution effect and income effect.
Source: Wikipedia "Slutsky equation" · CC BY-SA 4.0
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