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Computational Inefficiency Of Nonparametric Tests For Consistency Of Data With Household Consumption


  • Deb, Rahul


Recently Cherchye et al. (2007a) provided a nonparametric characterization of a general collective model for household consumption which includes externalities and public consumption. This characterization involved different necessary and sufficient conditions. We identify a special case of the household model for which their sufficiency conditions are also necessary. We show that verification of this sufficiency condition is NP Complete which provides justification for the parametric techniques used in the empirical literature.

Suggested Citation

  • Deb, Rahul, 2007. "Computational Inefficiency Of Nonparametric Tests For Consistency Of Data With Household Consumption," MPRA Paper 2700, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:2700

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    References listed on IDEAS

    1. Fama, Eugene F., 1998. "Market efficiency, long-term returns, and behavioral finance," Journal of Financial Economics, Elsevier, vol. 49(3), pages 283-306, September.
    2. Fama, Eugene F, 1991. " Efficient Capital Markets: II," Journal of Finance, American Finance Association, vol. 46(5), pages 1575-1617, December.
    3. Fama, Eugene F, 1970. "Efficient Capital Markets: A Review of Theory and Empirical Work," Journal of Finance, American Finance Association, vol. 25(2), pages 383-417, May.
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    Cited by:

    1. Anyck Dauphin & Abdel‐Rahmen El Lahga & Bernard Fortin & Guy Lacroix, 2011. "Are Children Decision‐Makers within the Household?," Economic Journal, Royal Economic Society, vol. 121(553), pages 871-903, June.
    2. Deb, Rahul, 2008. "Interdependent Preferences, Potential Games and Household Consumption," MPRA Paper 6818, University Library of Munich, Germany.

    More about this item


    Collective household models; intrahousehold allocation; revealed preference; nonparametric analysis; NP Completeness;

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation

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