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Consumer Theory with Non-Parametric Taste Uncertainty and Individual Heterogeneity

Christopher Dobronyi, Christian Gouriéroux

arXiv 26 Oct 2020 · Econometrics

arXiv:2010.13937 · PDF · DOI · OpenAlex · Extracted main text

Abstract

We introduce two models of non-parametric random utility for demand systems: the stochastic absolute risk aversion (SARA) model, and the stochastic safety-first (SSF) model. In each model, individual-level heterogeneity is characterized by a distribution $\pi\in\Pi$ of taste parameters, and heterogeneity across consumers is introduced using a distribution $F$ over the distributions in $\Pi$. Demand is non-separable and heterogeneity is infinite-dimensional. Both models admit corner solutions. We consider two frameworks for estimation: a Bayesian framework in which $F$ is known, and a hyperparametric (or empirical Bayesian) framework in which $F$ is a member of a known parametric family. Our methods are illustrated by an application to a large U.S. panel of scanner data on alcohol consumption.

Citation extraction

62
references
174
in-text mentions
62
distinct cited
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16,619
main-text words

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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
1Guha, R. and S. Ng (2019) A Machine Learning Analysis of Seasonal and Cyclical Sales in Weekly Scanner Data0.9416383%
2Dobronyi, C. and C. Gouriéroux (2020) Stochastic Revealed Preference: A Non-Parametric Analysis self0.90319774%
3Chernozhukov, V., J. Hausman, and W. Newey (2020) Demand Analysis with Many Prices0.87452100%
4Deaton, A. and J. Muellbauer (1980) An Almost Ideal Demand System0.84333100%
5Ferguson, T (1974) Prior Distributions on Spaces of Probability Measures0.8307357%
6Burda, M., M. Harding, and J. Hausman (2008) A Bayesian Mixed Logit-Probit Model for Multinomial Choice0.81142100%
7Crawford, I. and M. Polisson (2016) Demand Analysis with Partially Observed Prices0.81142100%
8Hausman, J. and W. Newey (2016) Individual Heterogeneity and Average Welfare0.81142100%
9Brown, B. and M. Walker (1989) The Random Utility Hypothesis and Inference in Demand Systems0.73732100%
10Grant, S (1995) A Strong (Ross) Characterization of Multivariate Risk Aversion0.73732100%

Showing the top 10 of 62 scored citations.