This paper proposes new power indices for revealed preference tests. The indices are based on models of irrational consumption behavior where the consumer randomly allocates a certain fraction of expenditure. The methods allow a researcher to trace out the entire power curve against random expenditure allocation. The power indices are illustrated on altruistic choices in experimental data.
Journal of Economic Behavior & Organization
Power Against Random Expenditure Allocation for Revealed Preference Tests
Journal Article
Reference
Hjertstrand, Per (2021). “Power Against Random Expenditure Allocation for Revealed Preference Tests”. Journal of Economic Behavior & Organization 188, 36–45. doi.org/10.1016/j.jebo.2021.05.001
Hjertstrand, Per (2021). “Power Against Random Expenditure Allocation for Revealed Preference Tests”. Journal of Economic Behavior & Organization 188, 36–45. doi.org/10.1016/j.jebo.2021.05.001
Author
Per Hjertstrand