Parametric Recoverability of Preferences

Yoram Halevy, Dotan Persitz () and Lanny Zrill

Microeconomics.ca working papers from Vancouver School of Economics

Abstract: We bring revealed preference theory to bear on the problem of recovering approximate parametric preferences from consistent and inconsistent consumer choices. The paper investigates two measures for the incompatibility between the revealed preference relation implied by choices and the ranking induced by the proposed parametric preferences. We provide a novel characterization of several well-known inconsistency indices through these incompatibility measures. This allows a researcher to analyze both consistent and inconsistent choices, by decomposing an incompatibility measure into inconsistency and misspecification indices.

Keywords: Revealed Preference; Recoverability of Preferences; GARP; inconsistency; incompatibility (search for similar items in EconPapers)
JEL-codes: C00 C18 D00 D11 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2012-06-30, Revised 2015-08-28
New Economics Papers: this item is included in nep-exp and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (50)

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Related works:
Journal Article: Parametric Recoverability of Preferences (2018)
Working Paper: Parametric Recoverability of Preferences (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:ubc:pmicro:yoram_halevy-2012-20

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