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Best nonparametric bounds on demand responses

Blundell, Richard; Browning, Martin; Crawford, Ian - Centre for Microdata Methods and Practice (CEMMAP) - 2005

This paper uses revealed preference inequalities to provide tight nonparametric bounds on consumer responses to price changes. Price responses are allowed to vary nonparametrically across the income distribution by exploiting microdata on consumer expenditures and incomes over a finite set of...

Persistent link: https://www.econbiz.de/10005727696

Afriat in the Lab

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

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

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

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