Improving Revealed Preference Bounds on Demand Responses

18 Pages Posted: 13 Dec 2007

See all articles by Richard W. Blundell

Richard W. Blundell

UCL; affiliation not provided to SSRN; IFS; IZA Institute of Labor Economics; Centre for Economic Policy Research (CEPR)

Martin Browning

University of Copenhagen - Department of Economics

Ian Crawford

Institute for Fiscal Studies (IFS)

Abstract

There are three key dimensions by which revealed preference bounds on consumer demand responses can be improved. The first relates to the improvements that arise from using expansion paths for given relative prices, E-bounds. The second concerns the addition of new price information. Thirdly, there are improvements due to assuming separability. Our previous research has examined the first two cases. In this article, we show how to impose separability assumptions within a fully nonparametric analysis and distinguish between weak and homothetic separability. We also apply these ideas to the analysis of demand responses using United Kingdom household level data.

Suggested Citation

Blundell, Richard W. and Blundell, Richard W. and Browning, Martin and Crawford, Ian, Improving Revealed Preference Bounds on Demand Responses. International Economic Review, Vol. 48, Issue 4, pp. 1227-1244, November 2007, Available at SSRN: https://ssrn.com/abstract=1071229 or http://dx.doi.org/10.1111/j.1468-2354.2007.00460.x

Richard W. Blundell (Contact Author)

UCL ( email )

Department of Economics
Gower Street
London, WC1E 6BT
United Kingdom
+44 20 7504 5863 (Phone)
+44 20 7916 2773 (Fax)

HOME PAGE: http://www.ucl.ac.uk/~uctp39a/

affiliation not provided to SSRN

No Address Available

IFS

7 Ridgmount Street
London, WC1E 7AE
United Kingdom

HOME PAGE: http://www.ifs.org.uk

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Martin Browning

University of Copenhagen - Department of Economics ( email )

Ă˜ster Farimagsgade 5
Bygning 26
1353 Copenhagen K.
Denmark
(45) 35-32-30-70 (Phone)
(45) 35-32-30-64 (Fax)

Ian Crawford

Institute for Fiscal Studies (IFS) ( email )

7 Ridgmount Street
London, WC1E 7AE
United Kingdom

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