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Testing axioms of revealed preference in Stata

Author

Listed:
  • Marcos Demetry

    (Linnaeus University)

  • Per Hjertstrand

    (Research Institute of Industrial Economics)

  • Matthew Polisson

    (University of Bristol)

Abstract

The revealed preference approach in economics is central to the empirical analysis of consumer behavior. In this article, we introduce the commands checkax, aei, and powerps as a bundle within the package rpaxioms. The first command allows a user to test whether consumer expenditure data satisfy several revealed preference axioms; the second command calculates measures of good- ness of fit when the data violate these axioms; and the third command calculates power against uniformly random behavior as well as predictive success for each axiom. We illustrate the commands using individual-level experimental data and household-level aggregate consumption data.

Suggested Citation

  • Marcos Demetry & Per Hjertstrand & Matthew Polisson, 2022. "Testing axioms of revealed preference in Stata," Stata Journal, StataCorp LP, vol. 22(2), pages 319-343, June.
    • Handle: RePEc:tsj:stataj:v:22:y:2022:i:2:p:319-343
    DOI: 10.1177/1536867X221106374
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    Cited by:

    1. Marcos Demetry & Per Hjertstrand, 2023. "Consistent subsets: Computing the Houtman–Maks index in Stata," Stata Journal, StataCorp LP, vol. 23(2), pages 578-588, June.

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    More about this item

    Keywords

    rpaxioms; checkax; aei; powerps; revealed preference; generalized axiom of revealed preference; Afriat efficiency index; power; predictive success;
    All these keywords.

    JEL classification:

    • C87 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Econometric Software
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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