Nonparametric Tests of Collectively Rational Consumption Behavior: an Integer Programming Procedure

Laurens Cherchye (), Bram De Rock, Jeroen Sabbe () and Frederic Vermeulen ()

No 2008_001, ECARES Working Papers from Université Libre de Bruxelles, Ecares

Abstract: We present an IP-based nonparametric (revealed preference) testing procedure for rational consumption behavior in terms of general collective models, which include consumption externalities and public consumption. An empirical application to data drawn from the Russia Longitudinal Monitoring Survey (RLMS) demonstrates the practical usefulness of the procedure. Finally, we present extensions of the testing procedure to evaluate the goodness-of-fit of the collective model subject to testing, and to quantify and improve the power of the corresponding collective rationality tests.

Keywords: collective consumption model; revealed preferences; nonparametric rationality tests; integer programming (IP) (search for similar items in EconPapers)
JEL-codes: D11 D12 C14 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ecm
Date: 2008
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Related works:
Working Paper: Nonparametric Tests of Collectively Rational Consumption Behavior: An Integer Programming Procedure (2008)
Journal Article: Nonparametric tests of collectively rational consumption behavior: An integer programming procedure (2008)
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Persistent link: http://EconPapers.repec.org/RePEc:eca:wpaper:2008_001

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