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Nonparametric tests of collectively rational consumption behavior: an integer programming procedure

Citation

Cherchye, Laurens; De Rock, Bram; Sabbe, Jeroen; & Vermeulen, Frederic (2008). Nonparametric tests of collectively rational consumption behavior: an integer programming procedure. Journal of Econometrics, 147(2), 258-265.

Abstract

We present an IP-based nonparametric (revealed preference) testing procedure for rational consumption behavior in terms of a general collective model, which includes consumption externalities and public consumption. An empirical application to data drawn from the Russia Longitudinal Monitoring Survey (RLMS) demonstrates the practical usefulness of the procedure. Finally, we present extensions of the testing procedure to evaluate the goodness-of-fit (accounting for optimization error as well as measurement error) of the collective model subject to testing.

URL

http://dx.doi.org/10.1016/j.jeconom.2008.09.010

Reference Type

Journal Article

Year Published

2008

Journal Title

Journal of Econometrics

Author(s)

Cherchye, Laurens
De Rock, Bram
Sabbe, Jeroen
Vermeulen, Frederic