Testing Axioms of Revealed Preference in Stata

20 Pages Posted: 1 Aug 2020

See all articles by Marcos Demetry

Marcos Demetry

Linnaeus University - Department of Economics and Statistics; Research Institute of Industrial Economics (IFN)

Per Hjertstrand

Research Institute of Industrial Economics (IFN)

Matthew Polisson

affiliation not provided to SSRN

Date Written: June 17, 2020

Abstract

This paper introduces the Stata commands checkax, aei, and powerps as a bundle within the package rpaxioms. The first command allows the user to test whether consumer demand data satisfy a number of revealed preference axioms at a given efficiency level, the second command calculates measures of goodness-of-fit when the data violate these axioms, and the third command calculates power against uniformly random behavior as well as predictive success for each axiom
at any given efficiency level. The commands are illustrated using experimental individual-level data and aggregated household-level consumption data.

Keywords: Rpaxioms, Checkax, Aei, Powerps, Afriat Effciency Index, GARP, Revealed Preference, Power, Predictive Success

JEL Classification: C87, D12

Suggested Citation

Demetry, Marcos and Hjertstrand, Per and Polisson, Matthew, Testing Axioms of Revealed Preference in Stata (June 17, 2020). IFN Working Paper No. 1342, 2020, Available at SSRN: https://ssrn.com/abstract=3629697 or http://dx.doi.org/10.2139/ssrn.3629697

Marcos Demetry

Linnaeus University - Department of Economics and Statistics ( email )

Växjö, 351 06
Sweden

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

Per Hjertstrand (Contact Author)

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

Matthew Polisson

affiliation not provided to SSRN

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