The objective of this study is to analyze the main determinants of alcoholic beverages consumption at home. Data comes from the latest Spanish Household National Survey, which provides information on expenditure and quantities of different food products by household. Because households are interviewed only 1 week, a large number of zeros have been recorded. Among the existing censured demand mo...

The Working Papers should not be reported as representing the views of the Banco Central do Brasil. The views expressed in the papers are those of the author(s) and do not necessarily reflect those of the Banco Central do Brasil. This paper characterizes ambiguity averse preferences in the absence of the completeness axiom. We axiomatize multiple selves versions of some of the most important ex...

The Measurement of Child Costs: Evidence from Ireland We apply an extension of the Rothbarth approach to estimate the share of household resources accruing to children (i.e., the cost of children) in Ireland. The method also allows us to identify the economies of scale in the household and indifference scales in Lewbel (2003)’s sense. A practical aspect of the present approach is that it does n...

Game theory traditionally specifies players’ numerical payoff functions. Following the concept of utility invariance in modern social choice theory, this paper explores what is implied by specifying equivalence classes of utility function profiles instead. Within a single game, utility transformations that depend on other players’ strategies preserve players’ preferences over their own strategi...

Integrated assessment models lack a microeconomic foundation in modelling environmental damages to the economy. To overcome this, damage coefficients are incorporated in standard microeconomic models. Firms and consumers take both damages and prices as given. Demand, supply, profit and expenditure functions under damage coefficients are derived that allow easy implementation in applied economic...

In important situations, individual decision-making is systematically biased. When deciding (rather than consuming), extrinsic attributes of choice options are more salient than intrinsic attributes. People overestimate extrinsic attributes and therefore put too much effort into acquiring income and gaining status, lowering their utility level. These mistakes are accentuated in authoritarian sy...

We derive a representation theorem for time preferences (on the prize-time space) which identifies a novel notion of relative discounting as the key ingredient. This representation covers a variety of time preference models, including the standard exponential and hyperbolic discounting models and certain nontransitive time preferences, such as the similarity-based and subadditive discounting mo...

In important situations, individual decision-making is systematically biased. When deciding (rather than consuming), extrinsic attributes of choice options are more salient than intrinsic attributes. People overestimate extrinsic attributes and therefore put too much effort into acquiring income and gaining status, lowering their utility level. These mistakes are accentuated in authoritarian sy...

We study the outcome of the amendment voting procedure based on a potentially incomplete preference relation. A decision-maker evaluates candidates in a list and iteratively updates her choice by comparing the status-quo to the next candidate. She favors the status-quo when the two candidates are incomparable according to her underlying preference. Developing a revealed preference approach, we ...

We consider a broad class of intertemporal economic problems and characterize the short-run long-run responses demand for good to permanent increase in its market price. Depending on interplay between self-productivity time discounting, we show that dynamic substitution effects can generate price elasticities opposite signs short run long run. (JEL D11, D15, H20, J22, J24)