A Monte Carlo Study of the Necessary and Sufficient Conditions for Weak Separability

Per Hjertstrand ()
Additional contact information
Per Hjertstrand: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden, http://www.nek.lu.se/en/contact

No 2008:10, Working Papers from Lund University, Department of Economics

Abstract: Weak separability is an important concept in many fields of economic theory. This paper uses Monte Carlo experiments to investigate the performance of newly developed nonparametric revealed preference tests for weak separability. A main finding is that the bias of the sequentially implemented test for weak separability proposed by Fleissig and Whitney (A New PC-Based Test for Varian’s Weak Separability Conditions, Journal of Business and Economic Statistics 21, 133-143, 2003) is low. The theoretically unbiased Swofford and Whitney test (A revealed preference test for weakly separable utility maximization with incomplete adjustment, Journal of Econometrics 60, 235-249, 1994) is found to perform better than all sequentially implemented test procedures, but is found to suffer from an empirical bias, most likely because of the complexity in executing the test procedure. As a further source of information, we also perform sensitivity analyses on the nonparametric revealed preference tests. It is found that the Fleissig and Whitney test seems to be sensitive to measurement.

Keywords: GARP; LP test; Monte Carlo simulations; NONPAR; Weak separability; Swofford and Whitney test (search for similar items in EconPapers)
JEL-codes: C14 C15 C43 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2008-01-14, Revised 2008-09-11
New Economics Papers: this item is included in nep-ecm, nep-ore and nep-upt
References: Add references at CitEc
Citations: View citations in EconPapers (7)

Published in Advances in Econometrics - Measurement Error: Consequences, Applications and Solutions , Binner, Jane, Edgerton, David, Elger, Thomas (eds.), 2009, pages 151-182, Emerald Group Publishing Ltd.

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hhs:lunewp:2008_010

Access Statistics for this paper

More papers in Working Papers from Lund University, Department of Economics School of Economics and Management, Box 7080, S-22007 Lund, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by Iker Arregui Alegria ().