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Measuring Nash Equilibrium Consumption Externalities


  • Emanuela Randon


We estimate Nash equilibrium consumption externalities in household petrol budget shares. The reaction curves are obtained from an AIDS with petrol consumption externality. Using a continuous set of ten year cross sections from FES (1991-2000), we analyse the externality generated by households living in Newcastle area (UK). In each year, income decile cohorts are created. Panel techniques are used after pooling cross section estimates have been discussed. Using non nested procedures, two restricted models are compared: the cohort specific externality effect and the single popular case. The single popular is the model accepted by the data.

Suggested Citation

  • Emanuela Randon, "undated". "Measuring Nash Equilibrium Consumption Externalities," Discussion Papers 04/08, Department of Economics, University of York.
  • Handle: RePEc:yor:yorken:04/08

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    References listed on IDEAS

    1. Banks, James & Blundell, Richard & Lewbel, Arthur, 1996. "Tax Reform and Welfare Measurement: Do We Need Demand System Estimation?," Economic Journal, Royal Economic Society, vol. 106(438), pages 1227-1241, September.
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    More about this item


    Household Economics; Nath Equilibirum; Externalities; Cross-Sectional Models; Models with Panel Data hazard; non-responsiveness; resource allocation;

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D62 - Microeconomics - - Welfare Economics - - - Externalities

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