Template-type: ReDif-Paper 1.0
Author-Name: Cosaert, S.
Author-Name: Demuynck, T.
Author-workplace-name: Microeconomics & Public Economics
Title: Nonparametric welfare and demand analysis with unobserved individual heterogeneity
Abstract: In this paper, we combine elementary revealed preference principles and nonparametric estimation techniques in order to obtain nonparametric bounds on the distribution of the money metric utility over a population of heterogeneous households. The main benefit of our approach is that it is independent of any functional specification on the household utility functions, which means that our results are robust against parametric specification errors. We further demonstrate that our methodology can be used to establish bounds on the distribution of the demand function for counterfactual price regimes. In order to demonstrate the relevance of our approach, we illustrate our findings using a repeated cross-sectional household consumption data set.
Series: GSBE Research Memoranda
Creation-Date: 20140101
Number: 010
File-URL: https://cris.maastrichtuniversity.nl/ws/files/1492871/guid-a548baf0-491f-4cab-9468-090f61d004f3-ASSET1.0.pdf
File-Format: application/pdf
File-Size: 402356
Handle: Repec:unm:umagsb:2014010
DOI: 10.26481/umagsb.2014010