Characterizing Pareto Improvements in an Interdependent Demand System

  • Peter Kooreman Lambert Schoonbeek
  • Published 2002


Interdependent preferences generally imply Pareto inefficiency. For a general demand system, we provide a characterization of Pareto improvements. For a prominent parametric specification, the Linear Expenditure System, we characterize in detail the welfare loss associated with interdependent preferences. Using an estimated empirical model of this kind, we… (More)

1 Figure or Table


  • Presentations referencing similar topics