Testing axioms of revealed preference in Stata

Marcos Demetry, Per Hjertstrand and Matthew Polisson

Stata Journal, 2022, vol. 22, issue 2, 319-343

Abstract: The revealed preference approach in economics is central to the empirical analysis of consumer behavior. In this article, we introduce the commands checkax, aei, and powerps as a bundle within the package rpaxioms. The first command allows a user to test whether consumer expenditure data satisfy several revealed preference axioms; the second command calculates measures of good- ness 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. We illustrate the commands using individual-level experimental data and household-level aggregate consumption data.

Keywords: rpaxioms; checkax; aei; powerps; revealed preference; generalized axiom of revealed preference; Afriat efficiency index; power; predictive success (search for similar items in EconPapers)
Date: 2022
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Working Paper: Testing Axioms of Revealed Preference in Stata (2022)
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DOI: 10.1177/1536867X221106374

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