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Demand analysis with partially observed prices

Author

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  • Ian Crawford

    (Institute for Fiscal Studies and Nuffield College, Oxford)

  • Matthew Polisson

    (Institute for Fiscal Studies and University of Bristol)

Abstract

In empirical demand, industrial organization, and labor economics, prices are often unobserved or unobservable since they may only be recorded when an agent transacts. In the absence of any additional information, this partial observability of prices is known to lead to a number of identi?cation problems. However, in this paper, we show that theory-consistent demand analysis remains feasible in the presence of partially observed prices, and hence partially observed implied budget sets, even if we are agnostic about the nature of the missing prices. Our revealed preference approach is empirically meaningful and easy to implement. We illustrate using simple examples.

Suggested Citation

  • Ian Crawford & Matthew Polisson, 2015. "Demand analysis with partially observed prices," IFS Working Papers W15/16, Institute for Fiscal Studies.
    • Handle: RePEc:ifs:ifsewp:15/16
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    References listed on IDEAS

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    More about this item

    Keywords

    Demand; missing prices; partial identification; revealed preference;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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