2020

Samuelson's Approach to Revealed Preference Theory: Some Recent Advances

Reprint No. 2020:16

Author(s): Thomas Demuynck and Per HjertstrandYear: 2020 Title: Paul Samuelson: Master of Modern Economics Chapter: 9Editor(s): R.G. Anderson, W.A. Barnett och R.A. CordPublisher: Palgrave MacmillanCity: London Pages: 193–227
Online article (restrictions may apply)
Preliminary version


Since Paul Samuelson introduced the theory of revealed preference, it has become one of the most important concepts in economics. This chapter surveys some recent contributions in the revealed preference literature. We depart from Afriat's theorem, which provides the conditions for a data set to be consistent with the utility maximization hypothesis. We provide and motivate a new condition, which we call the Varian inequalities. The advantage of the Varian inequalities is that they can be formulated as a set of mixed integer linear inequalities, which are linear in the quantity and price data. We show how the Varian inequalities can be used to derive revealed preference tests for weak separability, and show how it can be used to formulate tests of the collective household model. Finally, we discuss measurement errors in the observed data and measures of goodness-of- t, power and predictive success.


Reference:
Demuynck, Thomas and Per Hjertstrand (2020), "Samuelson's Approach to Revealed Preference Theory: Some Recent Advances". Chapter 9, pp. 193–227 in R.G. Anderson, W.A. Barnett och R.A. Cord, eds., Paul Samuelson: Master of Modern Economics. London: Palgrave Macmillan.

Per Hjertstrand

Contact

Ph: +46 8 665 4557
per.hjertstrand@ifn.se

Interdisciplinary European Studies

The European Union and the Return of the Nation State

9783030350048_200x_the-european-union-and-the-return-of-the-nation-state.jpg

This book explores the complex and ever-changing relationship between the European Union and its member states. The recent surge in tension in this relationship has been prompted by the actions of some member state governments as they question fundamental EU values and principles and refuse to implement common decisions seemingly on the basis of narrowly defined national interests.

About the book

Events

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