Consumer choice under certainty and uncertainty in applied econometrics

Arbeitspapier

The paper lists salient characteristics of the certainty theory of consumer choice and discusses the import of prominent empirical analyses of the theory. All of them reject the theory's empirical relevance which suggests that the theory is unfit to analyze consumer choice in an uncertain world. The paper presents an extension of the certainty theory to a theory about consumer choice under uncertainty in which consumer behavior has interesting new properties. I conclude with an empirical test of the empirical relevance of an uncertainty version of Stone's Linear Expenditure System. In the given empirical context Stone's System is empirically relevant.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: EERI Research Paper Series ; No. 08/2021

Classification and Topics

• Classification: Wirtschaft ; Relation of Economics to Other Disciplines ; History of Economic Thought: Quantitative and Mathematical ; Economic Methodology ; Econometrics ; Methodological Issues: General ; Multiple or Simultaneous Equation Models; Multiple Variables: General ; Neural Networks and Related Topics ; Model Construction and Estimation ; Model Evaluation, Validation, and Selection ; Consumer Economics: Empirical Analysis ; Market Structure, Pricing, and Design: Perfect Competition ; General Equilibrium and Disequilibrium: Other
• Subject: Utility function ; linear expenditure system ; almost ideal demand system ; income and substitution effects ; expectations' effect

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Stigum, Bernt P.
• Event: Veröffentlichung
• (who): Economics and Econometrics Research Institute (EERI)
• (where): Brussels
• (when): 2021

Further information

• Handle: http://hdl.handle.net/10419/251112
• Last update: 10.03.2025, 11:44 AM CET