The goal of this paper is to analyze consumer demand in markets with large price uncertainty. We develop a demand model for goods that are subject to habit formation. We show that consumption plans of forward looking individuals depend not only on preferences and current period prices, but also...

We consider expectations of the form E[logy|x] = Σ_j=1-super-d α_j log x_j as a good starting point for a more general analysis. We show why this naturally leads to the following flexible functional form: E[y|x] = f(Σ_j=1-super-dh_j(x_j)), where f(ċ) and the h_j(ċ)'s are estimated by cubic splines....

This paper proposes a new nonparametric estimator for general regression functions with multiple regressors. The method used here is motivated by a remarkable result derived by Kolmogorov (1957) and later tightened by Lorentz (1966). In short, any continuous function f(x_1,...,x_d) has the...