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Testing for intertemporal nonseparability

Author

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  • Ian Crawford

    (Institute for Fiscal Studies and Nuffield College, Oxford)

  • Matthew Polisson

    (Institute for Fiscal Studies and University of Bristol)

Abstract

This paper presents a nonparametric analysis of a common class of intertemporal models of consumer choice that relax consumption independence. Within this class and in the absence of any functional form restrictions on instantaneous preferences, we compare the revealed preference conditions for rational habit formation and rational anticipation. We show that these models are nonparametrically equivalent in the presence of finite date sets composed of prices, interest rates, and consumption choices.

Suggested Citation

  • Ian Crawford & Matthew Polisson, 2013. "Testing for intertemporal nonseparability," IFS Working Papers W13/19, Institute for Fiscal Studies.
    • Handle: RePEc:ifs:ifsewp:13/19
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    References listed on IDEAS

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    Cited by:

    1. Cherchye, Laurens & De Rock, Bram & Kerstens, Pieter Jan, 2018. "Production with storable and durable inputs: Nonparametric analysis of intertemporal efficiency," European Journal of Operational Research, Elsevier, vol. 270(2), pages 498-513.
    2. Peter Levell, 2014. "Revealed preference and consumption behaviour at retirement," IFS Working Papers W14/29, Institute for Fiscal Studies.
    3. Sam Cosaert & Tom Potoms, 2024. "Intertemporal Consumption With Anticipating, Remembering, And Experiencing Selves," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 65(3), pages 1283-1322, August.

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    More about this item

    Keywords

    anticipation; habits; revealed preference; time separability;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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