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Revealed Price Preference: Theory and Empirical Analysis

Rahul Deb, Yuichi Kitamura, John K. -H. Quah, Jörg Stoye

arXiv 8 Jan 2018 · Econometrics · publishedThe Review of Economic Studies (2022) · 17 citations (OpenAlex)

arXiv:1801.02702 · PDF · DOI · OpenAlex · Extracted main text

Abstract

To determine the welfare implications of price changes in demand data, we introduce a revealed preference relation over prices. We show that the absence of cycles in this relation characterizes a consumer who trades off the utility of consumption against the disutility of expenditure. Our model can be applied whenever a consumer's demand over a strict subset of all available goods is being analyzed; it can also be extended to settings with discrete goods and nonlinear prices. To illustrate its use, we apply our model to a single-agent data set and to a data set with repeated cross-sections. We develop a novel test of linear hypotheses on partially identified parameters to estimate the proportion of the population who are revealed better off due to a price change in the latter application. This new technique can be used for nonparametric counterfactual analysis more broadly.

Citation extraction

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Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Attanasio and Pastorino (2020) Nonlinear Pricing in Village Economies0.693121100%
2McFadden and Richter (1991) Stochastic rationality and revealed stochastic preference0.69371100%
3Blundell, Browning, and Crawford (2008) Best Nonparametric Bounds on Demand Responses0.64441100%
4Gabaix (2014) A Sparsity-Based Model of Bounded Rationality0.64441100%
5Kitamura and Stoye (2018) Nonparametric Analysis of Random Utility Models0.63024175%
6Afriat (1967) The Construction of Utility Functions from Expenditure Data0.5113167%
7Hausman and Newey (2016) Individual Heterogeneity and Average Welfare0.51121100%
8Lazzati, Quah, and Shirai (2018) Nonparametric Analysis of Monotone Choice0.51121100%
9Nevo (2000) A Practitioner's Guide to Estimation of Random-Coefficients Logit Models of Demand0.51121100%
10Norris and Pendakur (2015) Consumption Inequality in Canada, 1997 to 20090.51121100%

Showing the top 10 of 59 scored citations.

Cited by, within the corpus

arXiv econ.EM papers that cite this one, ranked by how heavily they lean on it.

Citing paperIntensityMentionsSections
1Nonparametric Analysis of Random Utility Models0.92843
2Nonparametric Counterfactuals in Random Utility Models0.40511
3A Computational Approach to Identification of Treatment Effects for Policy Evaluation0.40511
4A Frequentist Approach to Revealed Preference Analysis0.40511
5Consumer Welfare Under Individual Heterogeneity0.40511
6https://api.hubner.info/api/dl/jmpIt's complicated: A Non–parametric Test of Preference Stability between Singles and Couples0.40511