Preference Heterogeneity and the Rank of Demand Systems
偏好异质性与需求系统的秩
This article examines the effect of preference heterogeneity on nonparametric and parametric tests of the rank of demand systems. Using samples of households drawn from the U.K. Family Expenditure Survey, the authors find that preference heterogeneity increases the rank of demand systems. When the effects of household characteristics on demand are removed by semiparametric techniques, a rank-three demand system appears to be an adequate empirical specification for all…