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Nonparametric tests of collectively rational consumption behavior: an integer programming procedure

[journal article]

Cherchye, Laurens; Rock, Bram de; Sabbe, Jeroen; Vermeulen, Frederic

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Please use the following Persistent Identifier (PID) to cite this document:http://nbn-resolving.de/urn:nbn:de:0168-ssoar-205363

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Abstract We present an IP-based nonparametric (revealed preference) testing procedure for rational consumption behavior in terms of a general collective model, which includes consumption externalities and public consumption. An empirical application to data drawn from the Russia Longitudinal Monitoring Survey (RLMS) demonstrates the practical usefulness of the procedure. Finally, we present extensions of the testing procedure to evaluate the goodness-of-fit (accounting for optimization error as well as measurement error) of the collective model subject to testing.
Classification Economics
Free Keywords Collective consumption model; Revealed preferences; Nonparametric rationality tests; Integer programming (IP)
Document language English
Publication Year 2008
Page/Pages p. 258-265
Journal Journal of Econometrics, 147 (2008) 2
DOI http://dx.doi.org/10.1016/j.jeconom.2008.09.010
Status Postprint; peer reviewed
Licence PEER Licence Agreement (applicable only to documents from PEER project)