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Testing the Stability of Preferences: A Nonparametric Approach

Author

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  • Sakong, Yong
  • Hayes, Dermot J.

Abstract

A test for preference stability is developed that strengthens existing nonparametric procedures. The test uses indifference curve convexity to restrict (unobservable) compensated consumption bundles. Adding up, noninferiority, and the Slutsky equation are used to limit the range of these compensated consumption bundles. A program is proposed that simultaneously measures the changes in consumption quantities satisfying the theoretical restrictions and the expenditure elasticities minimizing the required changes. The program is applied to meat consumption data and is shown to be capable of detecting small changes in preference.

Suggested Citation

  • Sakong, Yong & Hayes, Dermot J., 1993. "Testing the Stability of Preferences: A Nonparametric Approach," Staff General Research Papers Archive 558, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genres:558
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    Cited by:

    1. Schreiner, mark & Birchler, Donald, 1995. "Evidence Of Shifts In Tastes For Meats In The United States," Economic Analysis of Meat Promotion, June 2-3, 1995, Denver, Colorado 279615, Regional Research Projects > NECC-63: Research Committee on Commodity Promotion.
    2. Dong, Fengxia & Fuller, Frank H., 2004. "Testing For Separability And Structural Change In Urban Chinese Food Demand," 2004 Annual meeting, August 1-4, Denver, CO 19923, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Fengxia Dong & Frank Fuller, 2010. "Dietary Structural Change in China's Cities: Empirical Fact or Urban Legend?," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 58(1), pages 73-91, March.
    4. Chavas, Jean-Paul & Cox, Thomas L., 1997. "On nonparametric demand analysis," European Economic Review, Elsevier, vol. 41(1), pages 75-95, January.
    5. Pingsun Leung & Walter Miklius, 1997. "Demand for nutrition vs. demand for tastes," Applied Economics Letters, Taylor & Francis Journals, vol. 4(5), pages 291-295.
    6. Jin, Hyun Joung & Koo, Won W., 2003. "The Effect Of Food-Safety Related Information On Consumers' Preference: The Case Of Bse Outbreak In Japan," 2003 Annual meeting, July 27-30, Montreal, Canada 22043, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    7. Chen Zhen & Michael K. Wohlgenant, 2006. "Meat Demand under Rational Habit Persistence," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 54(4), pages 477-495, December.
    8. Rafael Cortez & Ben Senauer, 1996. "Taste Changes in the Demand for Food by Demographic Groups in the United States: A Nonparametric Empirical Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(2), pages 280-289.
    9. Olivia, Susan & Gibson, John, 2003. "Unit Value Biases in Meat Demand in Indonesia," 2003 Conference (47th), February 12-14, 2003, Fremantle, Australia 58195, Australian Agricultural and Resource Economics Society.
    10. San Miguel, Fernando & Ryan, Mandy & Scott, Anthony, 2002. "Are preferences stable? The case of health care," Journal of Economic Behavior & Organization, Elsevier, vol. 48(1), pages 1-14, May.
    11. Frechette, Darren L. & Jin, Hyun-Joung, 2002. "Distinguishing transitory nonlinear shocks from permanent structural change," Structural Change and Economic Dynamics, Elsevier, vol. 13(2), pages 231-248, June.
    12. Chalfant, James A. & Eshel, Dafna M. Disegni, 2001. "A Nonparametric Test Of Advertising'S Effectiveness," 2001 Annual meeting, August 5-8, Chicago, IL 20529, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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