Heterogeneity and the Non-Parametric Analysis of Consumer Choice: Conditions for Invertibility.
This paper considers structural non-parametric random utility models for continuous choice variables with unobserved heterogeneity. We provide sufficient conditions on random preferences to yield reduced-form systems of non-parametric stochastic demand functions that allow global invertibility betwe...
| Published in: | Review of Economic Studies Vol. 75; no. 4; pp. 1069 - 1081 |
|---|---|
| Main Authors: | , |
| Format: | Article |
| Published: |
Oxford University Press / UK
October 2008
|
| Subjects: | |
| Online Access: | View this record in EBSCOhost |
| Summary: | This paper considers structural non-parametric random utility models for continuous choice variables with unobserved heterogeneity. We provide sufficient conditions on random preferences to yield reduced-form systems of non-parametric stochastic demand functions that allow global invertibility between demands and non-separable unobserved heterogeneity. Invertibility is essential for global identification of structural consumer demand models, for the existence of well-specified probability models of choice and for the non-parametric analysis of revealed stochastic preference. We distinguish between new classes of models in which heterogeneity is separable and non-separable in the marginal rates of substitution, respectively. Reprinted by permission of the publisher. |
|---|