Best Nonparametric Bounds on Demand Responses

Richard Blundell (), Martin Browning and Ian Crawford ()

No 2005-16, CAM Working Papers from University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics

Abstract: 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 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 are measured by preference perturbations which are shown to usefully characterise taste change.

Keywords: demand responses; relative prices; revealed preference; semiparametric regression; changing tastes (search for similar items in EconPapers)
JEL-codes: D12 C14 C43 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ecm
Date: 2005-09
View list of references View citations in EconPapers

Downloads: (external link)
http://www.econ.ku.dk/CAM/Files/workingpapers/2005/2005-16.pdf (application/pdf)

Related works:
Working Paper: Best nonparametric bounds on demand responses (2005)
Working Paper: Best nonparametric bounds on demand responses (2005)
Journal Article: Best Nonparametric Bounds on Demand Responses (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:kud:kuieca:2005_16

Access Statistics for this paper

More papers in CAM Working Papers from University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics
Address: Øster Farimagsgade 5, Building 26, DK-1353 Copenhagen K., Denmark
Contact information at EDIRC.
Series data maintained by Henriette Aabo Hansen ().