Measuring Hidden Consumer Heterogeneity with Revealed Preferences
Fuente:
arXiv
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| Natura: | Preprint |
| Pubblicazione: |
2025
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| _version_ | 1866911737055281152 |
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| author | Seror, Avner |
| author_facet | Seror, Avner |
| contents | Consumer heterogeneity in revealed-preference data is larger than bilateral rationality tests can reveal. We construct a continuous nonparametric metric of this hidden heterogeneity by repeatedly subsampling choices, partitioning agents into groups whose pooled data are jointly rationalisable under a chosen consistency criterion and recording how often each pair is co-classified. The resulting kernel is positive semi-definite, embeds the population in a Hilbert space, and induces a metric with the triangle inequality. Under a necessary-and-sufficient contrast-rank condition, its spectral structure recovers latent preference types. Inference on demographic correlates proceeds via a Monte-Carlo-conditional test and a finite-sample-valid permutation test. Applied to US grocery scanner data, the construction reveals a joint-rationality gap of 0.62 between near-saturated pairwise compatibility and population-level co-typing; binary lottery data yield a comparable gap of 0.38. Standard demographics organise only a modest part of the scanner kernel structure. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2501_13721 |
| institution | arXiv |
| publishDate | 2025 |
| record_format | arxiv |
| spellingShingle | Measuring Hidden Consumer Heterogeneity with Revealed Preferences Seror, Avner Theoretical Economics Econometrics Consumer heterogeneity in revealed-preference data is larger than bilateral rationality tests can reveal. We construct a continuous nonparametric metric of this hidden heterogeneity by repeatedly subsampling choices, partitioning agents into groups whose pooled data are jointly rationalisable under a chosen consistency criterion and recording how often each pair is co-classified. The resulting kernel is positive semi-definite, embeds the population in a Hilbert space, and induces a metric with the triangle inequality. Under a necessary-and-sufficient contrast-rank condition, its spectral structure recovers latent preference types. Inference on demographic correlates proceeds via a Monte-Carlo-conditional test and a finite-sample-valid permutation test. Applied to US grocery scanner data, the construction reveals a joint-rationality gap of 0.62 between near-saturated pairwise compatibility and population-level co-typing; binary lottery data yield a comparable gap of 0.38. Standard demographics organise only a modest part of the scanner kernel structure. |
| title | Measuring Hidden Consumer Heterogeneity with Revealed Preferences |
| topic | Theoretical Economics Econometrics |
| url | https://arxiv.org/abs/2501.13721 |