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Testing Consumer Theory: Evidence From a Natural Field Experiment

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  • Adena, Maja

    (WZB)

  • Huck, Steffen

    (WZB)

  • Rasul, Imran

    (UCL)

Abstract

We present evidence from a natural field experiment designed to shed light on whether individual behavior is consistent with a neoclassical model of utility maximization subject to budget constraints. We do this through the lens of a field experiment on charitable giving. We find that the behavior of at least 80% of individuals, on both the extensive and intensive margins, can be rationalized within a standard neoclassical choice model in which individuals have preferences, defined over own consumption and their contribution towards the charitable good, satisfying the axioms of revealed preference.

Suggested Citation

  • Adena, Maja & Huck, Steffen & Rasul, Imran, 2017. "Testing Consumer Theory: Evidence From a Natural Field Experiment," Rationality and Competition Discussion Paper Series 54, CRC TRR 190 Rationality and Competition.
    • Handle: RePEc:rco:dpaper:54
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    References listed on IDEAS

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    1. Steffen Huck & Imran Rasul & Andrew Shephard, 2015. "Comparing Charitable Fundraising Schemes: Evidence from a Natural Field Experiment and a Structural Model," American Economic Journal: Economic Policy, American Economic Association, vol. 7(2), pages 326-369, May.
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    Cited by:

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    3. Huifang Ma & Weidong Chen & Hailin Ma & Hude Yang, 2021. "Influence of Publicity and Education and Environmental Values on the Green Consumption Behavior of Urban Residents in Tibet," IJERPH, MDPI, vol. 18(20), pages 1-14, October.

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    More about this item

    Keywords

    natural field experiment; revealed preference;

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers

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