Preference shifts and the change of consumption composition

While most of the literature explaining the change in consumption composition has focused on the role of relative prices and non-homothetic preferences, this paper examines the importance of preference shifts. I introduce dynamics in preferences and find that they play a relevant role and that their exclusion worsens model performance at least as much as the exclusion of allowing non-homothetic preferences.

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Year of publication:	2014
Authors:	Addessi, William
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 125.2014, 1, p. 14-17
Publisher:	Elsevier
Subject:	Preference shifts \| Structural transformation \| Multisector models \| Consumption

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Type of publication:	Article
Classification:	E21 - Consumption; Saving ; L16 - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure; Industrial Price Indices ; O41 - One, Two, and Multisector Growth Models
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010939489