Homothetic Efficiency: Theory and Applications

Reprint No. 2019:17

Author(s): Jan Heufer and Per HjertstrandYear: 2019 Title: Journal of Business & Economic Statistics Volume (No.): 37 (2) Pages: 235–247

Homothetic Efficiency: Theory and Applications Jan Heufer and Per Hjertstrand

We provide a nonparametric revealed preference approach to demand analysis based on homothetic efficiency. Homotheticity is widely assumed (often implicitly) because it is a convenient and often useful restriction. However, this assumption is rarely tested, and data rarely satisfy testable conditions. To overcome this, we provide a way to estimate homothetic efficiency of consumption choices. The method provides considerably higher discriminatory power against random behavior than the commonly used Afriat efficiency. We use experimental and household survey data to illustrate how our approach is useful for different empirical applications and can provide greater predictive success.

Heufer, Jan and Per Hjertstrand (2019), "Homothetic Efficiency: Theory and Applications". Journal of Business & Economic Statistics 37(2), 235–247.

Per Hjertstrand


Ph: +46 8 665 4557

Integrating Immigrants into the Nordic Labour Markets

An Overall Perspective


Denmark, Finland, Norway and Sweden face similar problems of integrating large groups of immigrants, especially low-educated ones from outside the EU, into their labour markets. In this volume, edited by Lars Calmfors, IFN, and Nora Sánchez Gassen in cooperation with researchers from across the Nordic Region analyse how labour market integration of immigrants can be promoted. 

About the book


Seminars organized by IFN


To present ongoing research informal brown-bag seminars are held on Mondays at 11:30 am. This is an opportunity for IFN researchers to test ideas and results.

Academically oriented seminars are most of the time held on Wednesdays at 10 am. At these events researchers from IFN and other institutions present their research.

In addition, IFN organizes seminars open to the public. Topics for these are derived from the IFN research.

Research Institute of Industrial Economics, Grevgatan 34 - 2 fl, Box 55665, SE-102 15 Stockholm, Sweden | Phone: +46-(0)8-665 45 00 | info@ifn.se