Consistent Subsets: Computationally Feasible Methods to Compute the Houtman–Maks-Index

Reprint No. 2015:10

Author(s): Jan Heufer and Per HjertstrandYear: 2015 Title: Economics Letters Volume (No.): 128 (March) Pages: 87–89
Online article (restrictions may apply)

We provide two methods to compute the largest subset of a set of observations that is consistent with the Generalised Axiom of Revealed Preference. The algorithm provided by Houtman and Maks (1985) is not computationally feasible for larger data sets, while our methods are not limited in that respect. The first method is an application of Gross and Kaiser’s (1996) approximate algorithm and is only applicable for two-dimensional data sets, but it is very fast and easy to implement. The second method is a mixed-integer linear programming approach that is slightly more involved but still fast and not limited by the dimension of the data set.

Heufer, Jan och Per Hjertstrand (2015), "Consistent Subsets: Computationally Feasible Methods to Compute the Houtman–Maks-Index". Economics Letters 128(March), 87–89.

Per Hjertstrand


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