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Improving revealed preference bounds on demand responses

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  • Blundell, R
  • Browning, M
  • Crawford, I

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.

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File URL: http://discovery.ucl.ac.uk/15869/1/15869.pdf
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Bibliographic Info

Paper provided by University College London in its series Open Access publications from University College London with number http://discovery.ucl.ac.uk/15869/.

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Date of creation: Nov 2007
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Publication status: Published in INTERNATIONAL ECONOMIC REVIEW (2007-11) v.48, p.1227-1244
Handle: RePEc:ner:ucllon:http://discovery.ucl.ac.uk/15869/

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Web page: http://www.ucl.ac.uk

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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 Studiën.
  2. Laurens CHERCHYE & Thomas DEMUYNCK & Bram DE ROCK, 2011. "Revealed preference tests for weak separability: an integer programming approach," Center for Economic Studies - Discussion papers ces11.25, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.

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