Working Paper Series
Homothetic Preferences Revealed
() and Per Hjertstrand
Abstract: We propose a method to recover homothetic preferences from
choice data with minor optimization or measurement errors. Our method
allows for a more detailed graphical analysis to reveal subjects'
preferences and to choose appropriate functional forms for parametric
analysis. It can also be used to extend applications of the money metric
function, such as parametric recoverability as introduced by Halevy et al.
(2017). It can also improve nonparametric comparison of preferences as
suggested by Heufer (2014).
Keywords: Graphical Analysis; Homotheticity; Money Metric Utility; Recoverability; Revealed Preference; (follow links to similar papers)
JEL-Codes: C14; C91; D11; D12; (follow links to similar papers)
13 pages, November 9, 2017
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