Goodness of fit in optimizing consumer's model
AbstractWe provide two new indices of efficiency for determining the degree of coherence in an agent's consumption decisions. We analyze to which extent they improve the efficiency displayed by Varian's (Journal of Econometrics, 1990) index. We report on the results of a Montecarlo experiment that confirms that strict improvements of Varian's vector-index appear on a regular basis.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 20134.
Date of creation: 29 Sep 2009
Date of revision:
Consumer behavior; GARP; revealed preference; goodness of fit;
Find related papers by JEL classification:
- D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
- C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-01-30 (All new papers)
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- Tsur, Yacov, 1989. "On testing for revealed preference conditions," Economics Letters, Elsevier, vol. 31(4), pages 359-362, December.
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