This paper develops a new technique for the estimation of consumer demand models with unobserved heterogeneity subject to revealed preference inequality restrictions. Particular attention is given to nonseparable heterogeneity. The inequality restrictions are used to identify bounds on quantile demand functions. A nonparametric estimator for these bounds is developed and asymptotic properties are derived. An empirical application using data from the U.K. Family Expenditure Survey illustrates the usefulness of the methods by deriving bounds and confidence sets for estimated quantile demand functions.
Authors
CPP Co-Director
Richard is Co-Director of the Centre for the Microeconomic Analysis of Public Policy (CPP) and Senior Research Fellow at IFS.
UCLA
Dennis Kristensen
Working Paper details
- DOI
- 10.1920/wp.cem.2011.2111
- Publisher
- IFS
Suggested citation
R, Blundell and D, Kristensen and R, Matzkin. (2011). Bounding quantile demand functions using revealed preference inequalities. London: IFS. Available at: https://ifs.org.uk/publications/bounding-quantile-demand-functions-using-revealed-preference-inequalities (accessed: 1 July 2024).
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