Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/241958 
Year of Publication: 
2021
Series/Report no.: 
cemmap working paper No. CWP22/21
Publisher: 
Centre for Microdata Methods and Practice (cemmap), London
Abstract: 
To determine the welfare implications of price changes in demand data, we introduce a revealed preference relation over prices. We show that the absence of cycles in this relation characterizes a consumer who trades off the utility of consumption against the disutility of expenditure. Our model can be applied whenever a consumer's demand over a strict subset of all available goods is being analyzed; it can also be extended to settings with discrete goods and nonlinear prices. To illustrate its use, we apply our model to a single-agent data set and to a data set with repeated cross-sections. We develop a novel test of linear hypotheses on partially identified parameters to estimate the proportion of the population who are revealed better off due to a price change in the latter application. This new technique can be used for nonparametric counterfactual analysis more broadly
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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