Income Elasticities Without Parameters

Per Hjertstrand

No 1324, Working Paper Series from Research Institute of Industrial Economics

Abstract: This paper proposes a simple non-parametric framework to calculate income elasticities from a data set of observed prices and consumed quantities without having to estimate any parameters. The framework can be applied when the price-quantity data satisfies a revealed preference axiom called the strong version of the strong axiom of revealed preference (SSARP). The framework is used to calculate income elasticities for food and non-alcoholic drinks from a rich panel of household expenditures. For this category, it is found that households are rather homogeneous in their demand responses.

Keywords: Income elasticity; Non-parametric; Revealed preference; SSARP (search for similar items in EconPapers)
JEL-codes: D11 D12 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2020-03-17
New Economics Papers: this item is included in nep-agr
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Citations: View citations in EconPapers (1)

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