We propose a new optimal consumption model in which the degree of addictiveness of habit formation is directly controlled through a constraint on admissible consumption. In particular, we assume that the individual is unwilling to consume at a rate below a certain proportion 0α≤1 of her...

Despite the intensive efforts made by economists to examine regional income inequality in China, limited attention has been paid to disentangle the contribution of regional price differentials. This paper examines regional price differential in urban China over the period 1986 to 2001. Spatial...

Using a unique data set of medium and large enterprises (MLEs), which covers four Russian regions and the three sectors manufacturing and mining, construction and trade and distribution, we estimate fixed effects specifications of static labor demand equations for the year 1997. The most...

We study the identification and estimation of preferences in hedonic discrete choice models of demand for differentiated products. In the hedonic discrete choice model, products are represented as a finite dimensional bundle of characteristics, and consumers maximize utility subject to a budget...

The Alchian-Allen substitution theorem states that an increase of the prices of two similar goods by the same amount leads to a relative increase in the compensated demand of the more expensive good. In this paper we generalize this theorem to ordinary demand functions and show under which...

We provide new evidence from the 1980, 1990, and 2000 Decennial Census of Housing that the expenditure share on housing is constant over time and across U.S. metropolitan areas (MSA). Consistent with this observation, we consider a basic model in which identical households with Cobb-Douglas...

Based on the households' utility maximisation, a closed form approximation of the consumption function is derived and the deep parameters of the consumption function are estimated using aggregate euro area data. The novel element in our approach is the parameterisation of the information content...