Sharp for SARP: Nonparametric Bounds on Counterfactual Demands

Richard Blundell (), Martin Browning, Laurens Cherchye, Ian Crawford, Bram De Rock and Frederic Vermeulen

American Economic Journal: Microeconomics, 2015, vol. 7, issue 1, 43-60

Abstract: Sharp nonparametric bounds are derived for counterfactual demands and Hicksian compensating and equivalent variations. These "i-bounds" refine and extend earlier results of Blundell, Browning, and Crawford (2008). We show that their bounds are sharp under the Weak Axiom of Revealed Preference (WARP) since they do not require transitivity. The new bounds are sharp under the Strong Axiom of Revealed Preference (SARP). By requiring transitivity they can be used to bound welfare measures. The new bounds on welfare measures are shown to be operationalized through algorithms that are easy to implement. (JEL D04, D11)

JEL-codes: D04 D11 (search for similar items in EconPapers)
Date: 2015
Note: DOI: 10.1257/mic.20130150
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (24)

Downloads: (external link)
http://www.aeaweb.org/articles.php?doi=10.1257/mic.20130150 (application/pdf)
http://www.aeaweb.org/aej/mic/ds/0701/2013-0150_ds.zip (application/zip)
http://www.aeaweb.org/aej/mic/data/0701/2013-0150_data.zip (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: Sharp for SARP: Nonparametric bounds on counterfactual demands (2015)
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: https://EconPapers.repec.org/RePEc:aea:aejmic:v:7:y:2015:i:1:p:43-60

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Journal: Microeconomics is currently edited by Johannes Hörner

More articles in American Economic Journal: Microeconomics from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().