We prove a new identification theorem showing nonparametric identification of the joint distribution of random coefficients in general nonlinear and additive models. This differs from existing random coefficients models by not imposing a linear index structure for the regressors. We then model unobserved preference heterogeneity in consumer demand as utility functions with random Barten scales. These Barten scales appear as random coeffi-cients in nonlinear demand equations. Using Canadian data, we compare estimated energy demand functions with and without random Barten scales. We find that unobserved preference heterogeneity substantially affects the estimated consumer surplus costs of an energy tax.

About the speaker

Arthur Lewbel, Boston College

The Research School of Economics hosts four active seminar series in Applied Microeconomics, Economic Theory, Macroeconomics as well as a General series. Speakers include international and locally well-known economists.

Afternoon tea available.