title: Revealed preference analysis of characteristics models
creator: Blow, Laura
creator: Browning, Martin
creator: Crawford, Ian
subject:  "Organics" in general
subject:  Markets and trade
subject: Consumer issues
subject: Europe
description: Characteristics models have been found to be useful in many areas of economics. However, their empirical implementation tends to rely heavily on functional form assumptions. In this paper we develop a revealed preference approach to characteristics models. We derive the necessary and su¢ cient empirical conditions under which data on the market behaviour of heterogeneous, price-taking consumers are nonparametrically consistent with the consumer characteristics model. Where these conditions hold, we show how information may be recovered on individual consumer’s marginal valuations of product attributes. In some cases marginal valuations are point identi…ed and in other cases we can only recover bounds.  Where the conditions fail we highlight the role which the introduction of unobserved product attributes can play in rationalising the data. We implement these ideas using consumer panel data on the Danish milk market.
date: 2005
type: Journal paper
type: NonPeerReviewed
format: application/pdf
identifier: http://orgprints.org/5008/1/5008.pdf
identifier: Blow, Laura; Browning, Martin and Crawford, Ian (2005) Revealed preference analysis of characteristics models. Review of Economic Studies. [ Unpublished, ]
relation: http://orgprints.org/5008/