This paper examines the extent to which gains-from-trade predictions from commonly-used trade theories are consistent with observed household consumption decisions. Our approach is based on inference from household-level estimation of food Engel curves in the US and in a few other countries. For...

Consumers often face choice settings in which alternatives are discrete. Examples include choices between variants of differentiated products, modes of urban transportation, residential locations, etc. In this paper compensated price elasticities and a corresponding(aggregate) Slutsky equation...

We propose a tractable dynamic framework for the joint determination of optimal consumption, portfolio choice, and healthcare irreversible investment. Our model is based on a Merton's portfolio and consumption problem, where, in addition, the agent can choose the time at which undertaking a...

The Japanese Consumer Price Index (CPI) is considered to be upwardly biased.This paper estimated the Engel curve based on National Survey of Family Incomeand Expenditure data to measure the bias. The estimated bias for the period 1989to 2004 was 0.53 percentage points per annum. Correcting the...

In this study, we investigate an optimal consumption and investment problem of an economic agent who faces a welfare constraint; the agent does not accept her expected utility (continuation value) falls below a certain fixed level regardless of the time and state. This optimization problem...