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Necessary and sufficient conditions for latent separability

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  • Ian Crawford

    ()
    (Institute for Fiscal Studies and University of Oxford)

Abstract

This paper extends the nonparametric methods developed by Samuelson (1948), Houthakker (1950), Afriat (1973), Diewert (1973) and Varian (1982, 1983) to latently separable models. It presents necessary and sufficient empirical conditions under which data on the market behaviour of a price-taking consumer, and a hypothesised allocation across latent groups are nonparametrically consistent with latent separability (Gorman (1968, 1978), Blundell and Robin (2000)). It considers homothetic latent separability and weak separability as special cases.

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File URL: http://cemmap.ifs.org.uk/wps/cwp0402.pdf
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Bibliographic Info

Paper provided by Institute for Fiscal Studies in its series IFS Working Papers with number W04/17.

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Length: 5 pp.
Date of creation: Jun 2004
Date of revision:
Handle: RePEc:ifs:ifsewp:04/17

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  1. Varian, Hal R, 1983. "Non-Parametric Tests of Consumer Behaviour," Review of Economic Studies, Wiley Blackwell, vol. 50(1), pages 99-110, January.
  2. Richard Blundell & Jean-Marc Robin, 2000. "Latent Separability: Grouping Goods without Weak Separability," Econometrica, Econometric Society, vol. 68(1), pages 53-84, January.
  3. Afriat, S N, 1973. "On a System of Inequalities in Demand Analysis: An Extension of the Classical Method," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(2), pages 460-72, June.
  4. Diewert, W E, 1973. "Afriat and Revealed Preference Theory," Review of Economic Studies, Wiley Blackwell, vol. 40(3), pages 419-25, July.
  5. Varian, Hal R, 1982. "The Nonparametric Approach to Demand Analysis," Econometrica, Econometric Society, vol. 50(4), pages 945-73, July.
  6. Varian, Hal R, 1984. "The Nonparametric Approach to Production Analysis," Econometrica, Econometric Society, vol. 52(3), pages 579-97, May.
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Cited by:
  1. Laura Blow & Martin Browning & Ian Crawford, 2005. "Revealed preference analysis of characteristics models," School of Economics Discussion Papers 0305, School of Economics, University of Surrey.
  2. Cherchye, L.J.H. & Crawford, I. & Rock, B. de & Vermeulen, F.M.P., 2011. "Aggregation without the Aggravation? Nonparametric Analysis of the Representative Consumer," Discussion Paper 2011-143, Tilburg University, Center for Economic Research.

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