Nonparametric tests of collectively rational consumption behavior: an integer programming procedure

Type Journal Article - Journal of Econometrics
Title Nonparametric tests of collectively rational consumption behavior: an integer programming procedure
Author(s)
Volume 147
Issue 2
Publication (Day/Month/Year) 2008
Page numbers 258-265
URL https://lirias.kuleuven.be/bitstream/123456789/158173/1/dps0801.pdf
Abstract
We present an IP-based nonparametric (revealed preference) testing procedure for rational consumption behavior in terms of a general collective model, which includes 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 (accounting for optimization error as well as measurement error) of the collective model subject to testing.

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