arXiv 2 Mar 2026 · Theoretical Economics
arXiv:2603.02456 · PDF · DOI · OpenAlex · Extracted main text
Hedonic models value goods through their characteristics but are typically interpreted under time-separable preferences. This assumption is restrictive: when some attributes are habit forming, observed prices reflect both contemporaneous utility and continuation values from past consumption. I develop a nonparametric revealed preference framework for dynamic hedonic valuation, deriving necessary and sufficient conditions for rationalisability over characteristics. The framework separates restrictions imposed by the hedonic price system from those imposed by intertemporal choice and provides diagnostics that quantify the severity of violations along each margin. Applied to household scanner data, I show that most failures of static hedonic valuation reflect violations of the hedonic price structure; conditional on satisfying this structure, allowing for habit formation improves behavioural fit. This alters the mapping from prices to willingness-to-pay and the implied welfare interpretation.
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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.
| Reference | Intensity | Mentions | Sections | Main text | |
|---|---|---|---|---|---|
| 1 | Crawford, Ian (2010) Habits Revealed | 0.950 | 7 | 4 | 86% |
| 2 | Gorman, W. M (1956) A Possible Procedure for Analysing Quality Differentials in the Egg Market | 0.928 | 4 | 3 | 100% |
| 3 | Blow, Laura and Browning, Martin and Crawford, Ian (2008) Revealed Preference Analysis of Characteristics Models | 0.836 | 12 | 5 | 58% |
| 4 | Afriat, S. N (1967) The Construction of Utility Functions from Expenditure Data | 0.737 | 5 | 3 | 40% |
| 5 | Becker, Gary S. and Grossman, Michael and Murphy, Kevin M (1994) An Empirical Analysis of Cigarette Addiction | 0.644 | 2 | 2 | 100% |
| 6 | Berry, Steven and Levinsohn, James and Pakes, Ariel (1995) Automobile Prices in Market Equilibrium | 0.644 | 2 | 2 | 100% |
| 7 | Hendel, Igal and Nevo, Aviv (2006) Sales and Consumer Inventory | 0.644 | 2 | 2 | 100% |
| 8 | Nevo, Aviv (2001) Measuring Market Power in the Ready-to-Eat Cereal Industry | 0.644 | 2 | 2 | 100% |
| 9 | Diewert, W. E (1973) Afriat and Revealed Preference Theory | 0.585 | 4 | 3 | 25% |
| 10 | Varian, Hal R (1982) The Nonparametric Approach to Demand Analysis | 0.585 | 4 | 3 | 25% |
Showing the top 10 of 45 scored citations.