A revealed preference test of rationing

Adrian R. Fleissig and Gerald Whitney

Economics Letters, 2011, vol. 113, issue 3, 234-236

Abstract: This paper derives a revealed preference test for utility maximization under rationing and can detect, for which goods rationing is binding without specifying a functional form or imposing rationing constraints prior to estimation. For UK data from 1920–55, we find evidence of utility maximization under rationing with rationing binding for food and other services. Estimated virtual prices exceed observed food prices by 16.5% in 1947 and observed prices of other services by 10.9% in 1952.

Keywords: Afriat Inequalities; Generalized axiom of revealed preference; Rationing (search for similar items in EconPapers)
JEL-codes: C14 E21 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:113:y:2011:i:3:p:234-236

DOI: 10.1016/j.econlet.2011.07.020

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