
handle: 10419/47459 , 10419/79276
This paper uses revealed preference inequalities to provide the tightest possible (best) nonparametric bounds on predicted consumer responses to price changes using consumer-level data over a finite set of relative price changes. These responses are allowed to vary nonparametrically across the income distribution. This is achieved by combining the theory of revealed preference with the semiparametric estimation of consumer expansion paths (Engel curves). We label these expansion path based bounds on demand responses as E-bounds. Deviations from revealed preference restrictions are measured by preference perturbations which are shown to usefully characterize taste change and to provide a stochastic environment within which violations of revealed preference inequalities can be assessed.
Demand responses , relative prices , revealed preference , semiparametric regression , changing tastes, revealed preference, ddc:330, semiparametric regression, relative prices, demand responses; relative prices; revealed preference; semiparametric regression; changing tastes, changing tastes, Demand responses, relative prices, revealed preference, semiparametric regression, changing tastes, D12, Demand responses, C14, C43, jel: jel:D12, jel: jel:C43, jel: jel:C14
Demand responses , relative prices , revealed preference , semiparametric regression , changing tastes, revealed preference, ddc:330, semiparametric regression, relative prices, demand responses; relative prices; revealed preference; semiparametric regression; changing tastes, changing tastes, Demand responses, relative prices, revealed preference, semiparametric regression, changing tastes, D12, Demand responses, C14, C43, jel: jel:D12, jel: jel:C43, jel: jel:C14
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