Testing The Significance Of Deviations From Rational Behavior
We propose procedures for testing statistically the significance of violations of nonparametric tests of optimization axioms when observed behavior is measured with error. The tests are robust against parametric specification of the error distribution, thus are nonparametric in both the statistical and economic senses, and are readily implemented numerically. An illustration with demand data is presented.
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- Chalfant, James A & Alston, Julian M, 1988. "Accounting for Changes in Tastes," Journal of Political Economy, University of Chicago Press, vol. 96(2), pages 391-410, April.
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- Tsur, Yacov, 1989. "On Testing For Revealed Preference Conditions," Staff Papers 14264, University of Minnesota, Department of Applied Economics.
- Varian, Hal R, 1982. "The Nonparametric Approach to Demand Analysis," Econometrica, Econometric Society, vol. 50(4), pages 945-73, July.
- Varian, Hal R., 1985. "Non-parametric analysis of optimizing behavior with measurement error," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 445-458.
- Epstein, Larry G. & Yatchew, Adonis J., 1985. "Non-parametric hypothesis testing procedures and applications to demand analysis," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 149-169.
- Varian, Hal R, 1984. "The Nonparametric Approach to Production Analysis," Econometrica, Econometric Society, vol. 52(3), pages 579-97, May.
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