Econometrica: Nov 2008, Volume 76, Issue 6

Best Nonparametric Bounds on Demand Responses

https://doi.org/10.3982/ECTA6069
p. 1227-1262

Richard Blundell, Martin Browning, Ian Crawford

This paper uses revealed preference inequalities to provide the tightest possible (best) nonparametric bounds on predicted consumer responses to price changes using consumerā€level data over a finite set of relative price changes. These responses are allowed to vary nonparametrically across the income distribution. 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 on demand responses as . Deviations from revealed preference restrictions are measured by preference perturbations which are shown to usefully characterize taste change and to provide a stochastic environment within which violations of revealed preference inequalities can be assessed.

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Supplement to "Best Nonparametric Bounds on Demand Responses"

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Supplement to "Best Nonparametric Bounds on Demand Responses"

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Supplement to "Best Nonparametric Bounds on Demand Responses"

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Supplement to "Best Nonparametric Bounds on Demand Responses"

This zip file contains data sets.

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Supplement to "Best Nonparametric Bounds on Demand Responses"

This zip file contains data sets.

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