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Consistent subsets: Computing the Houtman–Maks index in Stata

Author

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  • Marcos Demetry

    (Linnaeus University)

  • Per Hjertstrand

    (Research Institute of Industrial Economics, Stockholm)

Abstract

The Houtman–Maks index is a measure of the size of a violation of utility-maximizing (that is, rational) behavior. In this article, we introduce the command hmindex, which calculates the Houtman–Maks index for a dataset of prices and observed choices of a consumer. The command is illustrated with an empirical application.

Suggested Citation

  • 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.
    • Handle: RePEc:tsj:stataj:v:23:y:2023:i:2:p:578-588
    DOI: 10.1177/1536867X231175345
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    References listed on IDEAS

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    More about this item

    Keywords

    hmindex; Houtman–Maks index; revealed preference; WGARP; WARP;
    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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