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GARP violation, Economic Environment Distortions and Shadow Prices : Evidence from Household Expenditure Panel Data

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  • Marc-Arthur Diaye

    (ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz], CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • François Gardes

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Christophe Starzec

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper contributes to the discussion of the compatibility of consumers' behavior in "real" life with GARP. Within expenditure panel data we observe a relatively low rate of violation (240 out of 3630 households). We show that these violations do not imply an "irrational" behavior of the agents, but can be attributed to a change in the agents' choice conditions during a period of time, which includes a shift from a centrally planned towards a market oriented economy.

Suggested Citation

  • Marc-Arthur Diaye & François Gardes & Christophe Starzec, 2009. "GARP violation, Economic Environment Distortions and Shadow Prices : Evidence from Household Expenditure Panel Data," Post-Print halshs-00376747, HAL.
    • Handle: RePEc:hal:journl:halshs-00376747
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00376747
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    References listed on IDEAS

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