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 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.

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