Revealed preference tests for weak separability: An integer programming approach

Laurens Cherchye, Thomas Demuynck, Bram De Rock and Per Hjertstrand

Journal of Econometrics, 2015, vol. 186, issue 1, 129-141

Abstract: We present the revealed preference conditions that characterize the data sets that are consistent with the maximization of a weakly separable utility function. We show that verifying these revealed preference conditions is np-hard. We also present an integer programming approach, which is particularly attractive in view of empirical analysis. We demonstrate the versatility of this integer programming approach by showing that it allows for testing homothetic separability and weak separability of the indirect utility function. We illustrate the practical usefulness of the approach by an empirical application to Spanish household consumption data.

Keywords: Weak separability; Revealed preference; Integer programming (search for similar items in EconPapers)
JEL-codes: C14 C60 D01 D10 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (42)

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Working Paper: Revealed preference tests for weak separability: An integer programming approach (2015)
Working Paper: Revealed preference tests for weak separability: an integer programming approach (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:econom:v:186:y:2015:i:1:p:129-141

DOI: 10.1016/j.jeconom.2014.07.001

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