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An Introduction to Empirical Microeconomics

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An Introduction to Empirical Microeconomics

By: Matthew E. Kahn
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 Applied economists are "detectives". We know that we do not know your preferences. If we could learn about your willingness to pay for market goods such as cell phones or for non-market goods such as clean air and safe streets, then both businesses and governments will demand our services. Economists look for clues and design experiments to learn about people. For example, if a person buys a $5 Starbucks drink then we immediately learn that a lower bound on how much she is willing to pay for such a drink is $5. If a week later, when the price is now $7 if she no longer buys it then, we now have learned that we can bound her willingness to pay for this product between $5 and $7 dollars. This book applies this revealed preference logic to dozens of problems to teach you how economists learn about people by watching what they choose under different circumstances. Economics Microeconomics
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