Non-Choice Evaluations Predict Behavioral Responses to Changes in Economic Conditions
NBER Working Paper No. 19269
A central task in microeconomics is to predict choices in as-yet-unobserved situations (e.g., after some policy intervention). Standard approaches can prove problematic when sufficiently similar changes have not been observed or do not have observable exogenous causes. We explore an alternative approach that generates predictions based on relationships across decision problems between actual choice frequencies and non-choice subjective evaluations of the available options. In a laboratory experiment, we find that this method yields accurate estimates of price sensitivities for a collection of products under conditions that render standard methods either inapplicable or highly inaccurate.
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An data appendix is available at http://www.nber.org/data-appendix/w19269
This paper was revised on March 16, 2015
Document Object Identifier (DOI): 10.3386/w19269
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