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Testing Axioms of Revealed Preference in Stata

Author

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  • Demetry, Marcos

    (Research Institute of Industrial Economics (IFN))

  • Hjertstrand, Per

    (Research Institute of Industrial Economics (IFN))

  • Polisson, Matthew

    (University of Bristol)

Abstract

This paper introduces the Stata commands checkax, aei, and powers 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.

Suggested Citation

  • Demetry, Marcos & Hjertstrand, Per & Polisson, Matthew, 2020. "Testing Axioms of Revealed Preference in Stata," Working Paper Series 1342, Research Institute of Industrial Economics, revised 28 Feb 2022.
    • Handle: RePEc:hhs:iuiwop:1342
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    Cited by:

    1. Marcos Demetry & Per Hjertstrand, 2023. "Consistent subsets: Computing the Houtman–Maks index in Stata," Stata Journal, StataCorp LP, vol. 23(2), pages 578-588, June.

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    More about this item

    Keywords

    Rpaxioms; Checkax; Aei; Powerps; Revealed preference; GARP; Afriat effciency index; Power; Predictive success;
    All these keywords.

    JEL classification:

    • C87 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Econometric Software
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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