Best nonparametric bounds on demand responses

Arbeitspapier

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 discrete relative price changes. This is achieved by combining the theory of revealed preference with the semiparametric estimation of consumer expansion paths (Engel curves). We label these expansion path based bounds as E-bounds. Deviations from revealed preference restrictions aremeasured by preference perturbations which are shown to usefully characterise taste change.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IFS Working Papers ; No. 05,20

Classification and Topics

• Classification: Wirtschaft ; Consumer Economics: Empirical Analysis ; Semiparametric and Nonparametric Methods: General ; Index Numbers and Aggregation; Leading indicators
• Subject: Demand responses ; relative prices ; revealed preference ; semiparametric regression ; changing tastes

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Blundell, Richard ; Browning, Martin ; Crawford, Ian
• Event: Veröffentlichung
• (who): Institute for Fiscal Studies (IFS)
• (where): London
• (when): 2005

Further information

• DOI: doi:10.1920/wp.ifs.2005.0520
• Handle: http://hdl.handle.net/10419/47459
• Last update: 10.03.2025, 11:42 AM CET