Blundell, R;
Horowitz, J;
Parey, M;
(2017)
Nonparametric Estimation of a Nonseparable Demand Function under the Slutsky Inequality Restriction.
The Review of Economics and Statistics
, 99
(2)
pp. 291-304.
10.1162/REST_a_00636.
Preview |
Text
Blundell_BHP_REStat_May_2017.pdf - Published Version Download (791kB) | Preview |
Abstract
We present a method for consistent nonparametric estimation of a demand function with nonseparable unobserved taste heterogeneity subject to the shape restriction implied by the Slutsky inequality. We use the method to estimate gasoline demand in the United States. The results reveal differences in behavior between heavy and moderate gasoline users. They also reveal variation in the responsiveness of demand to plausible changes in prices across the income distribution. We extend our estimation method to permit endogeneity of prices. The empirical results illustrate the improvements in finite-sample performance of a nonparametric estimator from imposing shape restrictions based on economic theory.
| Type: | Article |
|---|---|
| Title: | Nonparametric Estimation of a Nonseparable Demand Function under the Slutsky Inequality Restriction |
| Open access status: | An open access version is available from UCL Discovery |
| DOI: | 10.1162/REST_a_00636 |
| Publisher version: | http://dx.doi.org/10.1162/REST_a_00636 |
| Language: | English |
| Additional information: | This version is the version of record. For information on re-use, please refer to the publisher’s terms and conditions. |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL SLASH UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics |
| URI: | https://discovery.ucl.ac.uk/id/eprint/1558042 |
Archive Staff Only
 |
View Item |
