We introduce an instrumental variables approach to estimate the importance of unmeasured quality growth for a set of 66 durable consumer goods. Our instrument is based on predicting which of these 66 goods will display rapid quality growth. Using pooled cross- relatively sections of households...

I develop a technique useful for obtaining more precise estimates of demand and supply curves when constrained to market-level data. It augments the estimation routine with data on the average characteristics of consumers that purchase different products. I apply the technique to the automobile...

The COVID-19 pandemic led to stark reductions in economic activity in India. We employ CMIE's Consumer Pyramids Household Survey to examine the timing, distribution, and mechanism of the impacts from this shock on income and consumption through December 2020. First, we estimate large and...

This paper studies the infinite horizon optimal consumption with a path-dependent reference under the exponential utility. The performance is measured by the difference between the non-negative consumption rate and a fraction of the historical consumption maximum. The consumption running maximum...

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...

Economists routinely make functional form assumptions about consumer demand to obtain welfare estimates—often for convenience, tractability, or both. How sensitive are welfare estimates to these assumptions? In this paper, we answer this question by providing bounds on welfare that hold for...

The COVID-19 pandemic led to stark reductions in economic activity in India. We employ CMIE's Consumer Pyramids Household Survey to examine the timing, distribution, and mechanism of the impacts from this shock on income and consumption through December 2020. First, we estimate large and...

We argue that recoveries from demand-driven recessions with expenditure cuts concentrated in services or non-durables will tend to be weaker than recoveries from recessions more biased towards durables. Intuitively, the smaller the bias towards more durable goods, the less the recovery is...