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Intertemporal Aggregation of Choice Data with Consumption Dependent Preferences

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  • Christopher Turansick

Abstract

We study consumption dependence in the context of random utility and repeated choice. We show that, in the presence of consumption dependence, the random utility model is a misspecified model of repeated rational choice. This misspecification leads to biased estimators and failures of standard random utility axioms. We characterize exactly when and by how much the random utility model is misspecified when utilities are consumption dependent.

Suggested Citation

  • Christopher Turansick, 2023. "Intertemporal Aggregation of Choice Data with Consumption Dependent Preferences," Papers 2302.05806, arXiv.org, revised Sep 2025.
    • Handle: RePEc:arx:papers:2302.05806
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    References listed on IDEAS

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