Revealed Preferences for Diamond Goods

Sam Cosaert

American Economic Journal: Microeconomics, 2018, vol. 10, issue 2, 83-117

Abstract: When consumers care not only for the quantity but also the value of a product, it could be rational to purchase products as they become more expensive. This study provides nonparametric—revealed preference—conditions to measure consumers' marginal willingness to pay for value (i.e., diamondness) associated with particular goods. This is the first nonparametric test of price-dependent preferences. The proposed diamondness measure is applied to observational data from the Russia Longitudinal Monitoring Survey. The results show that this diamondness measure is related to a product's visibility to society, which indicates a certain degree of conspicuous consumption.

JEL-codes: D12 P36 (search for similar items in EconPapers)
Date: 2018
Note: DOI: 10.1257/mic.20150168
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Citations: View citations in EconPapers (6)

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Working Paper: Revealed preferences for diamond goods (2013)
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