ABSTRACT. This article studies choice behavior under two types of salience effect: bottom-up stimulus-driven and top-down objective-driven salience. We incorporate both types of salience effect into a simple model that keeps the dichotomy of preference and menu. Applying the revealed preference...

Inspired by evidence from cognitive psychology, this article studies a simple choice model in which two systems jointly determine behavior: a fast, effortless, and gullible system 1 and a slow, effortful, and deliberate system 2. By incorporating both sources of "irrational" behavior, our model...

ABSTRACT. This article studies the behavioral implications of different roles of the reference alternative. We demarcate the boundaries of different reference-dependent choice models in terms of the distinct behavioral patterns these models induce. We provide characterizations of ownership...

A multilateral currency union removes the intraregional exchange rates but not the union rate variability with the rest of the world. The intraregional exchange rate variability is thus latent. A two-step procedure is developed to measure the variability. The measured variables are used to model...

This paper describes a quarterly macroeconometric model of the economy of People's Republic of China. The model comprises household consumption, investment, government, trade, production, prices, money, and employment blocks. The equilibrium-correction form is used for all the behavioral...

Measurement forms the substance of econometrics. This chapter outlines the history of econometrics from a measurement perspective - how have measurement errors been dealt with and how, from a methodological standpoint, did econometrics evolve so as to represent theory more adequately in relation...

This pilot empirical study seeks to ascertain how income inequality affects growth by incorporating panel data information into a macroeconometric model. People's Republic of China is used as the pilot fi eld. Provincial urban and rural household data are used to construct income inequality...