centre for microdata methods and practice

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Understanding individual behaviour

Models of individual choice remain the principal focus of research in microeconomics (and increasingly macroeconomics too given the importance of micro-foundations and distributional issues in modern macroeconomics). The ability to rationalise and predict individual choices and how they adjust in response to changes in the economic, social and policy environment is at the heart of many applied questions from education policy to welfare reform to the measurement of social progress. Indeed, this is an essential component of the general research programme of ex ante policy evaluation identified by James Heckman, 2000 joint Nobel Laureate, in our poll of CeMMAP Fellows' priorities for the future. Our work under this theme will provide answers to important empirical questions regarding individual behaviour based on application of robust methods developed in the Methods strand of the Centre's research. It will also provide inspiration for further methodological innovation shedding light on what works and what does not in practice and generating unforeseen improvements in methods. This work will also provide prototypes for other researchers on how to use frontier research methods to improve understanding of individual behaviour.

Research findings

We have been pursuing several projects that analyse consumer behaviour in supermarkets.
Date started: 01 June 2012
Unobserved heterogeneity is important in econometrics. People who look alike in terms of education, income, or other variables, make different choices about consumption, and savings. etc. Economic theory provides no guidance as to how unobserved heterogeneity should be modelled nor how important it might be.
Date started: 01 June 2012

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Centre for Microdata Methods and Practice

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