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Improving Revealed Preference Bounds On Demand Responses

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  • Richard Blundell
  • Martin Browning
  • Ian Crawford

Abstract

There are three key dimensions by which revealed preference bounds on consumer demand responses can be improved. The first relates to the improvements that arise from using expansion paths for given relative prices, E-bounds. The second concerns the addition of new price information. Thirdly, there are improvements due to assuming separability. Our previous research has examined the first two cases. In this article, we show how to impose separability assumptions within a fully nonparametric analysis and distinguish between weak and homothetic separability. We also apply these ideas to the analysis of demand responses using United Kingdom household level data. Copyright 2007 by the Economics Department Of The University Of Pennsylvania And Osaka University Institute Of Social And Economic Research Association.

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Bibliographic Info

Article provided by Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association in its journal International Economic Review.

Volume (Year): 48 (2007)
Issue (Month): 4 (November)
Pages: 1227-1244

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Handle: RePEc:ier:iecrev:v:48:y:2007:i:4:p:1227-1244

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Cited by:
  1. Richard BLUNDELL & Martin BROWNING & Laurens CHERCHYE & Ian CRAWFORD & Bram DE ROCK & Frederic VERMEULEN, 2012. "Sharp for SARP: nonparametric bounds on the behavioural and welfare effects of price changes," Center for Economic Studies - Discussion papers ces12.11, Katholieke Universiteit Leuven, Centrum voor Economische Studiƫn.

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