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Testing Utility Maximization with Measurement Errors in the Data

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Author

Summary, in English

Revealed preference axioms provide a simple way of testing data from consumers or firms for consistency with optimizing behavior. The resulting non-parametric tests are very attractive, since they do not require any ad hoc functional form assumptions. A weakness of such tests, however, is that they are non-stochastic. In this paper, we provide a detailed analysis of two approaches that can be used to derive non-parametric tests for utility maximization, which can account for measurement errors in observed price or quantity data.

Publishing year

2009

Language

English

Pages

199-236

Publication/Series

Advances in Econometrics

Volume

24

Document type

Journal article

Publisher

Elsevier

Topic

  • Economics

Keywords

  • Non-Parametric Tests
  • GARP
  • Weak separability
  • Revealed Preference
  • Additive Separability
  • SARP
  • Measurement Errors

Status

Published

ISBN/ISSN/Other

  • ISSN: 0731-9053