Consumer-related policy decisions often require analysis of aggregate responses or mean elasticities. However, in practice these mean elasticities are seldom used. Mean elasticities can be approximated using aggregate data, but that introduces aggregation bias for full and compensated price...

Policy analysis frequently requires estimates of aggregate (or mean) consumer elasticities. However, estimates are often made incorrectly, based on elasticity calculations at mean income. We provide in this paper an overall integrated analytical framework that encompasses these biases and...

This paper studies the problems of measuring economic growth under conditions of high inflation. Traditional bilateral index number theory implicitly assumes that variations in the price of a commodity within a period can be ignored. In order to justify this assumption under conditions of high...

We show that in a unit demand discrete choice framework with at least three goods, demand cannot be additively separable in own price. This result sharpens the analogous result of Jaffe and Weyl (2010) in the case of linear demand and has implications for testing of the discrete choice...

The paper presents a revision of the contemporary reductionistic demand theory, replacing the studying object, i.e. an individual, with a fuzzy collection of market buyers, regarded as a “statistical ensemble of consumers”. The new holistic market demand theory formally retains the...

This paper uses revealed preference restrictions and nonparametric statistical methods to bound a quality-constant price series for a good that changes quality over time. Unlike the more usual hedonic regression techniques for estimating quality-adjusted prices, this method does not require us...

This paper uses revealed preference restrictions and nonparametric statistical methods to bound true cost-of-living indices. These are compared to the popular price indices including the type used to calculated the UK RPI. This is used to assess the method of calculating the RPI for substitution...

We investigate necessary and sufficient nonparametric conditions for the quasi-hyperbolic consumer. These turn out to be quite tractable. We investigate the performance of this model compared to the standard exponential discounting model using consumer panel data.

It is often argued that price indexes do not fully capture the quality improvements of new goods in the market. Because of this shortcoming, price indexes are perceived to overestimate the actual price increases that occur. In this paper, I argue that the quality bias in price indexes is just as...

The Boskin report (1996) concluded that the US consumer price index (CPI) overestimated the inflation by 1.1 percentage points. This was due to several measurement errors in the CPI. One of them is called quality change bias. We compare two methods in this paper which can be used to correct for...