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A Simple Method to Account for Measurement Errors in Revealed Preference Tests

Hjertstrand, Per - Institutet för Näringslivsforskning (IFN) - 2013

Revealed preference tests are widely used in empirical applications of consumer rationality. These are static tests, and consequently, lack ability to handle measurement errors in the data. This paper extends and generalizes existing procedures that account for measurement errors in revealed...

Persistent link: https://www.econbiz.de/10010818424

Best nonparametric bounds on demand responses

Blundell, Richard; Browning, Martin; Crawford, Ian - Institute for Fiscal Studies (IFS) - 2005

This paper uses revealed preference inequalities to provide tight nonparametric bounds on consumer responses to price changes. Price responses are allowed to vary nonparametrically across the income distribution by exploiting microdata on consumer expenditures and incomes over a finite set of...

Persistent link: https://www.econbiz.de/10005509467

Best Nonparametric Bounds on Demand Responses

Blundell, Richard; Browning, Martin; Crawford, Ian - Centre for Applied Microeconometrics (CAM), Økonomisk … - 2005

This paper uses revealed preference inequalities to provide tight nonparametric bounds on consumer responses to price changes. Price responses are allowed to vary nonparametrically across the income distribution by exploiting micro data on consumer expenditures and incomes over a finite set of...

Persistent link: https://www.econbiz.de/10005543450

Best nonparametric bounds on demand responses

Blundell, Richard; Browning, Martin; Crawford, Ian - Centre for Microdata Methods and Practice (CEMMAP) - 2005

Persistent link: https://www.econbiz.de/10005727696

Nonparametric Engel Curves and Revealed Preference

Blundell, Richard; Browning, Martin; Crawford, Ian - Centre for Applied Microeconometrics (CAM), Økonomisk … - 2002

This paper applies revealed preference theory to the nonparametric statistical analysis of consumer demand. Knowledge of expansion paths is shown to improve the power of nonparametric tests of revealed preference. The tightest bounds on indifference surfaces and welfare measures are derived...

Persistent link: https://www.econbiz.de/10005749512

A Geometric Measure for the Violation of Utility Maximization

Heufer, Jan - Rheinisch-Westfälisches Institut für … - 2008

function. If a consumer is inconsistent with GARP, we might need a measure for the severity of inconsistency. One widely used …

Persistent link: https://www.econbiz.de/10005561984

Generating Random Optimising Choices

Heufer, Jan - Rheinisch-Westfälisches Institut für … - 2012

Generalised Axiom of Revealed Preferences (GARP), that is, they are consistent with utility maximisation. The choices are drawn … from an approximate uniform distribution on the admissible region on each budget which ensures consistency with GARP, based … it can be used to approximate the power of tests for conditions for which GARP is a necessary but not sufficient …

Persistent link: https://www.econbiz.de/10010558559

Heterogenous intertemporal elasticity of substitution and relative risk aversion: estimation of optimal consumption choice with habit formation and measurement errors

Natalia, Khorunzhina; Wayne Roy, Gayle - Volkswirtschaftliche Fakultät, … - 2011

This paper investigates the existence and degree of variation across house holds and over time in the intertemporal elasticity of substitution (IES) and the coefficient of relative risk aversion (RRA) that is generated by habit forming preferences. To do so, we develop a new nonlinear GMM...

Persistent link: https://www.econbiz.de/10009353832

A Monte Carlo Study of the Necessary and Sufficient Conditions for Weak Separability

Hjertstrand, Per - Nationalekonomiska Institutionen, Ekonomihögskolan - 2008

Weak separability is an important concept in many fields of economic theory. This paper uses Monte Carlo experiments to investigate the performance of newly developed nonparametric revealed preference tests for weak separability. A main finding is that the bias of the sequentially implemented...

Persistent link: https://www.econbiz.de/10005645197

Exploring the Effects of Aggregation Error in the Estimation of Consumer Demand Elasticities

Denton, Frank T.; Mountain, Dean C. - Department of Economics, McMaster University - 2007

Errors introduced by using aggregate data in estimating a consumer demand model have long been a concern. We study the effects of such errors on elasticity estimates derived from AIDS and QUAIDS models. Based on a survey of published articles, a generic parameterization of the income...

Persistent link: https://www.econbiz.de/10005405528