Working Paper No. 1309

Power Against Random Expenditure Allocation for Revealed Preference Tests

Published: December 3, 2019Pages: 12Keywords: GARP; Power; Revealed preferenceJEL-codes: C14; D12

Power Against Random Expenditure Allocation for Revealed Preference Tests Per Hjertstrand

This paper proposes new power indices for revealed preference tests. The indices are based on a model of irrational consumption behavior where the consumer randomly allocates a certain fraction of expenditure. The methods allow a researcher to trace out the entire power curve against random
expenditure allocation. The power indices are illustrated on altruistic choices in experimental data.

Per Hjertstrand


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Interdisciplinary European Studies

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This book explores how the European Union responds to the ongoing challenges to the liberal international order. These challenges arise both within the EU itself and beyond its borders, and put into question the values of free trade and liberal democracy. 

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