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Heufer, Jan; van Bruggen, Paul - 2016

Varian (1988) showed that the utility maximization hypothesis cannot be falsified when only a subset of goods is observed. We show that this result does not hold under the assumptions that unobserved prices and expenditures remain constant. These assumptions are naturally satisfied in laboratory...

Persistent link: https://www.econbiz.de/10011586710

A Geometric Measure for the Violation of Utility Maximization

Heufer, Jan - 2008

function. If a consumer is inconsistent with GARP, we might need a measure for the severity of inconsistency. One widely used …

Persistent link: https://www.econbiz.de/10010271072

Generating Random Optimising Choices

Heufer, Jan - 2012

Generalised Axiom of Revealed Preferences (GARP), that is, they are consistent with utility maximisation. The choices are drawn … from an approximate uniform distribution on the admissible region on each budget which ensures consistency with GARP, based … it can be used to approximate the power of tests for conditions for which GARP is a necessary but not sufficient …

Persistent link: https://www.econbiz.de/10010287336

A Comment on Revealed Preference with a Subset of Goods

van Bruggen, Paul - 2016

Varian (1988) introduced an important proposition regarding restrictions on consumption data if observations of the quantities of a good are missing. In this paper, a simple counterexample is presented to show that the original proof is incorrect, and a new proof is provided. The new proof is...

Persistent link: https://www.econbiz.de/10011586683

Power against random expenditure allocation for revealed preference tests

Hjertstrand, Per - 2019

This paper proposes new power indices for revealed preference tests. The indices are based on a model of irrational consumption behavior where the consumer randomly allocates a certain fraction of expenditure. The methods allow a researcher to trace out the entire power curve against random...

Persistent link: https://www.econbiz.de/10012145534

Afriat's Theorem for Indivisible Goods

Forges, Francoise; Iehlé, Vincent - 2013

We identify a natural counterpart of the standard GARP for demand data in which goods are all indivisible. We show that … standard GARP still applies. …

Persistent link: https://www.econbiz.de/10010328833

Samuelson's approach to revealed preference theory: Some recent advances

Demuynck, Thomas; Hjertstrand, Per - 2019

Since Paul Samuelson introduced the theory of revealed preference, it has become one of the most important concepts in economics. This chapter surveys some recent contributions in the revealed preference literature. We depart from Afriat's theorem, which provides the conditions for a data set to...

Persistent link: https://www.econbiz.de/10012145499

A simple method to account for measurement errors in revealed preference tests

Hjertstrand, Per - 2013

Revealed preference tests are widely used in empirical applications of consumer rationality. These are static tests, and consequently, lack ability to handle measurement errors in the data. This paper extends and generalizes existing procedures that account for measurement errors in revealed...

Persistent link: https://www.econbiz.de/10010335633

Testing Axioms of Revealed Preference in Stata

Demetry, Marcos; Hjertstrand, Per; Polisson, Matthew - 2020

This paper introduces the Stata commands checkax, aei, and powers as a bundle within the package rpaxioms. The first command allows the user to test whether consumer demand data satisfy a number of revealed preference axioms at a given efficiency level, the second command calculates measures of...

Persistent link: https://www.econbiz.de/10012615410

Revealed Preference and Nonparametric Analysis – Continuous Extensions and Recoverability

Heufer, Jan - 2012

This paper shows how revealed preference relations, observed under general budget sets, can be extended using closure operators which impose certain assumptions on preferences. Common extensions are based on the assumption that preferences are convex and/or monotonic, but we also consider...

Persistent link: https://www.econbiz.de/10010287290

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