Compensated Variation in Random Utility Models
In this paper we introduce the notion of random expenditure function and derive the distribution of the expenditure function and corresponding compensated choice probabilities in the general case when the (random) utilities are nonlinear in income. We also derive formulae for expenditure and choice under price (policy) changes conditional on the initial utility level. This is of particular interest for welfare measurement because it enables the researcher to analyze the distribution of Compensating variation.
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- P O Lindberg & E A Eriksson & L-G Mattsson, 1995.
"Invariance of achieved utility in random utility models,"
Environment and Planning A,
Pion Ltd, London, vol. 27(1), pages 121-142, January.
- P O Lindberg & E A Eriksson & L-G Mattsson, 1995. "Invariance of Achieved Utility in Random Utility Models," Environment and Planning A, , vol. 27(1), pages 121-142, January.
- Joseph A. Herriges & Catherine L. Kling, 1999. "Nonlinear Income Effects in Random Utility Models," The Review of Economics and Statistics, MIT Press, vol. 81(1), pages 62-72, February.
- Herriges, Joseph A. & Kling, Catherine L., 1999. "Nonlinear Income Effects in Random Utility Models," Staff General Research Papers Archive 1494, Iowa State University, Department of Economics.
- Daniel McFadden, 1977. "Modelling the Choice of Residential Location," Cowles Foundation Discussion Papers 477, Cowles Foundation for Research in Economics, Yale University.
- Aaberge, Rolf & Dagsvik, John K & Strom, Steinar, 1995. " Labor Supply Responses and Welfare Effects of Tax Reforms," Scandinavian Journal of Economics, Wiley Blackwell, vol. 97(4), pages 635-659, December.
- Daniel McFadden, 1996. "Computing Willingness-to-Pay in Random Utility Models," Working Papers _011, University of California at Berkeley, Econometrics Laboratory Software Archive. Full references (including those not matched with items on IDEAS)
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