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Bounding quantile demand functions using revealed preference inequalities

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  • Blundell, Richard
  • Kristensen, Dennis
  • Matzkin, Rosa

Abstract

This paper develops a new approach to the estimation of consumer demand models with unobserved heterogeneity subject to revealed preference inequality restrictions. Particular attention is given to nonseparable heterogeneity. The inequality restrictions are used to identify bounds on counterfactual demand. A nonparametric estimator for these bounds is developed and asymptotic properties are derived. An empirical application using data from the UK Family Expenditure Survey illustrates the usefulness of the methods.

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  • Blundell, Richard & Kristensen, Dennis & Matzkin, Rosa, 2014. "Bounding quantile demand functions using revealed preference inequalities," Journal of Econometrics, Elsevier, vol. 179(2), pages 112-127.
  • Handle: RePEc:eee:econom:v:179:y:2014:i:2:p:112-127
    DOI: 10.1016/j.jeconom.2014.01.005
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    More about this item

    Keywords

    Consumer behavior; Revealed preference; Bounds; Quantile regression;

    JEL classification:

    • C20 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - General
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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