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A general revealed preference test for quasilinear preferences: theory and experiments

Author

Listed:
  • Marco Castillo

    (Texas A&M University
    University of Melbourne
    IZA)

  • Mikhail Freer

    (University of Essex)

Abstract

We provide a generalized revealed preference test for quasilinear preferences. The test applies to nonlinear budget sets and non-convex preferences as those found in taxation and nonlinear pricing contexts. We study the prevalence of quasilinear preferences in a laboratory real-effort task experiment with nonlinear wages. The experiment demonstrates the empirical relevance of our test. We find support for either convex (non-separable) preferences or quasilinear preferences but weak support for the hypothesis of both quasilinear and convex preferences.

Suggested Citation

  • Marco Castillo & Mikhail Freer, 2023. "A general revealed preference test for quasilinear preferences: theory and experiments," Experimental Economics, Springer;Economic Science Association, vol. 26(3), pages 673-696, July.
    • Handle: RePEc:kap:expeco:v:26:y:2023:i:3:d:10.1007_s10683-023-09790-1
    DOI: 10.1007/s10683-023-09790-1
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    References listed on IDEAS

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    More about this item

    Keywords

    Revealed preferences; Quasilinear preferences; Lab experiments;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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