Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2017-11-03
Number: 17-103/I
Author-Name: Jan (J.P.M.) Heufer
Author-Email: heufer@ese.eur.nl
Author-Workplace-Name: Erasmus University Rotterdam, Erasmus School of Economics; Tinbergen Institute, The Netherlands
Author-Name: Per Hjertstrand
Author-Email: per.hjertstrand@ifn.se
Author-Workplace-Name: Research Institute of Industrial Economics
Title: Homothetic Preferences Revealed
Abstract: We propose a method to recover homothetic preferences from choice data with minor optimization or measurement errors. Our method allows for a more detailed graphical analysis to reveal subjects' preferences and to choose appropriate functional forms for parametric analysis. It can also be used to extend applications of the money metric function, such as parametric recoverability as introduced by Halevy et al. (2017). It can also improve nonparametric comparison of preferences as suggested by Heufer (2014).
Classification-JEL: C14, C91, D11, D12
Keywords: Graphical Analysis, Homotheticity, Money Metric Utility, Recoverability, Revealed Preference
File-Url: https://papers.tinbergen.nl/17103.pdf
File-Format: application/pdf
File-Size: 471523 bytes
Handle: RePEc:tin:wpaper:20170103