Working Paper Series
A Simple Method to Account for Measurement Errors in Revealed Preference Tests
Abstract: Revealed preference tests are widely used in empirical
applications of consumer rationality. These are static tests, and
consequently, lack ability to handle measurement errors in the data. This
paper extends and generalizes existing procedures that account for
measurement errors in revealed preference tests. In particular, it
introduces a very efficient method to implement these procedures, which
make them operational for large data sets. The paper illustrates the new
method for both classical and Berkson measurement errors models.
Keywords: Berkson measurement errors; Classical measurement errors; GARP; Revealed preference; (follow links to similar papers)
JEL-Codes: C43; D12; (follow links to similar papers)
18 pages, November 21, 2013
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