Title: Sharp for SARP: nonparametric bounds on the behavioural and welfare effects of price changes
Authors: Blundell, Richard
Browning, Martin
Cherchye, Laurens
Crawford, Ian
De Rock, Bram
Vermeulen, Frederic
Issue Date: Jul-2012
Publisher: KU Leuven CES
Series Title: CES - Discussion paper series DPS12.11 pages:1-13
Abstract: Sharp nonparametric bounds are derived for Hicksian compensating and equivalent variations. These “i-bounds” generalize earlier results of Blundell, Browning and Crawford (2008). We show that their e-bounds are sharp under the Weak Axiom of Revealed Preference (WARP). They do not require transitivity. The new i-bounds are sharp under the Strong Axiom of Revealed Preference (SARP). By requiring transitivity they can be used to bound welfare measures. The new bounds on welfare measures are shown to be operationalized through algorithms that are easy to implement.
Publication status: published
KU Leuven publication type: IR
Appears in Collections:Research Center of Public Economics, Leuven
Department of Economics, Leuven - miscellaneous
Faculty of Business and Economics, Campus Kulak Kortrijk – miscellaneous
Mathematics, Campus Kulak Kortrijk

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