Revealed Price Preference: Theory and Stochastic Testing
Rahul Deb (),
Yuichi Kitamura (),
John Quah () and
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Yuichi Kitamura: Cowles Foundation, Yale University, https://economics.yale.edu/people/yuichi-kitamura
No 2087, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University
We develop a model of demand where consumers trade-off the utility of consumption against the disutility of expenditure. This model is appropriate whenever a consumer’s demand over a strict subset of all available goods is being analyzed. Data sets consistent with this model are characterized by the absence of revealed preference cycles over prices. The model is readily generalized to the random utility setting, for which we develop nonparametric statistical tests. Our application on national household consumption data provides support for the model.
Pages: 37 pages
New Economics Papers: this item is included in nep-ecm, nep-mic and nep-upt
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Working Paper: Revealed Price Preference: Theory and Stochastic Testing (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:cwl:cwldpp:2087
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