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Publication Details

24 May 18

Revealed preferences for diamond goods.

Authors: COSAERT Sam.

DOI: http://doi.org/10.1257/mic.20150168

Abstract:

When consumers care not only for the quantity but also the value of a product, it could be rational to purchase products as they become more expensive. This study provides nonparametric - revealed preference - conditions to measure consumers' marginal willingness to pay for value (i.e., diamondness) associated with particular goods. This is the first nonparametric test of price-dependent preferences. The proposed diamondness measure is applied to observational data from the Russia Longitudinal Monitoring Survey. The results show that this diamondness measure is related to a product's visibility to society, which indicates a certain degree of conspicuous consumption.

Reference: COSAERT Sam. Revealed preferences for diamond goods. American Economic Journal: Microeconomics, 2018, vol. 10, n°2, pp. 83-117.

Keywords:
revealed preference,
diamond effect,
price-dependent preference,
conspicuous consumption

Project: Nonparametric analysis of household consumption, labour supply and welfare

Linked publications
CHERCHYE Laurens, COSAERT Sam, DE ROCK Bram, KERSTENS Pieter Jan, VERMEULEN Frederic.
Journal of Public Economics, 2018, vol. 166, pp. 98-114.
COSAERT Sam, DEMUYNCK Thomas.
Review of Economics and Statistics, 2018, vol. 100, n°2, pp. 349-361.
BRUYNEEL Sabrina, CHERCHYE Laurens, COSAERT Sam, DE ROCK Bram, DEWITTE Siefgried.
Quantitative Economics, 2017, vol. 8, n°3, pp. 1037-1082.
COSAERT Sam.
Computational Economics, 2017.