Nonparametric Engel Curves and Revealed Preference

Richard Blundell (r.blundell@ucl.ac.uk), Martin Browning and Ian Crawford

No 99-07, Discussion Papers from University of Copenhagen. Department of Economics

Abstract: This paper applies revealed preference theory to the nonparametric statistical analysis of consumer demand. It exploits the idea that price-taking individual households in the same market face the same relative prices, in order to smooth across the demands of individuals for each common price regime. This is shown to provide a stochastic structure within which to examine the consistency of household level data and revealed preference theory. An application is made to a long time series of repeated cross-sections from the 1974-1993 UK Family Expenditure Surveys. The consistency of this data with revealed preference theory is examined. Where rejections do occur, suitable adjustments to prices for quality or taste changes are explored. For periods of consistency with revealed preference bounds are placed on true cost of living indices.

Keywords: consumer demands; nonparametric regression; revealed preference (search for similar items in EconPapers)
JEL-codes: C43 D11 (search for similar items in EconPapers)
Pages: 64 pages
Date: 1998-07
New Economics Papers: this item is included in nep-ltv and nep-mic
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Citations: View citations in EconPapers (31)

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http://www.econ.ku.dk/english/research/publications/wp/1999/9907.pdf/ (application/pdf)

Related works:
Journal Article: Nonparametric Engel Curves and Revealed Preference (2003)
Working Paper: Nonparametric Engel Curves and Revealed Preference (2002)
Working Paper: Non-parametric Engel curves and revealed preferences (1997)
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Persistent link: https://EconPapers.repec.org/RePEc:kud:kuiedp:9907

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