Goods Versus Characteristics: Dimension Reduction and Revealed Preference
AbstractThis paper compares the goods and characteristics models of the consumer within a non-parametric revealed preference framework. Of primary interest is to make a comparison on the basis of predictive success that takes into account dimension reduction. This allows us to nonparametrically identify the model which best fits the data. We implement these procedures on household panel data from the UK milk market. The primary result is that the better fit of the characteristics model is entirely attributable to dimension reduction.
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Bibliographic InfoPaper provided by Department of Economics, University of Leicester in its series Discussion Papers in Economics with number 11/44.
Date of creation: Sep 2011
Date of revision: Dec 2011
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Postal: Department of Economics University of Leicester, University Road. Leicester. LE1 7RH. UK
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Web page: http://www2.le.ac.uk/departments/economics
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Other versions of this item:
- Matthew Polisson, 2011. "Goods Versus Characteristics: Revealed Preference Procedures for Nested Models," Economics Series Working Papers 531, University of Oxford, Department of Economics.
- Matthew Polisson, 2012. "Goods versus characteristics: dimension reduction and revealed preference," IFS Working Papers W12/02, Institute for Fiscal Studies.
- D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-02-01 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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"Revealed Preference in a Discrete Consumption Space,"
Discussion Papers in Economics
12/02, Department of Economics, University of Leicester, revised Feb 2012.
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