This Website uses cookies. By using this website you are agreeing to our use of cookies and to the terms and conditions listed in our data protection policy. Read more

Journal of Economic Behavior & Organization

Homothetic Preferences Revealed

Journal Article
Heufer, Jan and Per Hjertstrand (2019). “Homothetic Preferences Revealed”. Journal of Economic Behavior & Organization 157, 602–614.

Jan Heufer, Per Hjertstrand

We introduce a method to recover homothetic preferences from choice data with minor optimization or measurement errors. Our method allows for a more detailed graphical analysis to reveal subjects’ preferences and to choose appropriate functional forms for parametric analysis. It has also various other uses such as improving applications of the money metric function or classifying choice data into different preference types. We illustrate some of those approaches using data from an experiment on social preferences.