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On Testing the Utility Hypothesis

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  • Cox, James C

Abstract

In order to be able to conduct a test of the (core) utility hypothesis that is not confounded with tests of (subsidiary) hypotheses that economic agents all have the same preferences and that their preferences are weakly separable, it is necessary to use data that are disaggregated and complete. In order to carry out a utility hypothesis test with complete data, revealed preference theory must first be extended. The generalized axiom of revealed preference is extended to include labor supply and portfolio choice. Then a complete, disaggregated data set is used to test the utility hypothesis and two preference separability hypotheses. Copyright 1997 by Royal Economic Society.

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  • Cox, James C, 1997. "On Testing the Utility Hypothesis," Economic Journal, Royal Economic Society, vol. 107(443), pages 1054-1078, July.
  • Handle: RePEc:ecj:econjl:v:107:y:1997:i:443:p:1054-78
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    10. Raymond Fisman & Shachar Kariv & Daniel Markovits, 2007. "Individual Preferences for Giving," American Economic Review, American Economic Association, pages 1858-1876.
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    15. Syngjoo Choi & Raymond Fisman & Douglas Gale & Shachar Kariv, 2007. "Substantive and Procedural Rationality in Decisions under Uncertainty," Levine's Bibliography 122247000000000946, UCLA Department of Economics.
    16. Moscati, Ivan & Tubaro, Paola, 2009. "Random behavior and the as-if defense of rational choice theory in demand experiments," LSE Research Online Documents on Economics 27001, London School of Economics and Political Science, LSE Library.
    17. Steven Gjerstad, 2013. "Price dynamics in an exchange economy," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 52(2), pages 461-500, March.
    18. Alkire, Sabina, 2002. "Dimensions of Human Development," World Development, Elsevier, vol. 30(2), pages 181-205, February.
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    20. Steven Gjerstad, 2004. "Market Dynamics in Edgeworth Exchange," Microeconomics 0401006, EconWPA.
    21. Brocas, Isabelle & Carrillo, Juan D & Combs, T. Dalton & Kodaverdian, Niree, 2015. "Consistency in Simple vs. Complex Choices over the Life Cycle," CEPR Discussion Papers 10457, C.E.P.R. Discussion Papers.
    22. David Dickinson, 2000. "Ultimatum decision-making: A test of reciprocal kindness," Theory and Decision, Springer, vol. 48(2), pages 151-177, March.
    23. Jan Heufer & Paul van Bruggen, 2016. "Afriat in the Lab," Tinbergen Institute Discussion Papers 16-095/I, Tinbergen Institute.
    24. James Andreoni & John Miller, 2002. "Giving According to GARP: An Experimental Test of the Consistency of Preferences for Altruism," Econometrica, Econometric Society, vol. 70(2), pages 737-753, March.

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