Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 1342: Testing Axioms of Revealed Preference in Stata

Marcos Demetry (), Per Hjertstrand () and Matthew Polisson ()
Additional contact information
Marcos Demetry: Research Institute of Industrial Economics (IFN), Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden
Per Hjertstrand: Research Institute of Industrial Economics (IFN), Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden
Matthew Polisson: University of Bristol

Abstract: This paper introduces the Stata commands checkax, aei, and powers as a bundle within the package rpaxioms. The first command allows the user to test whether consumer demand data satisfy a number of revealed preference axioms at a given efficiency level, the second command calculates measures of goodness-of-fit when the data violate these axioms, and the third command calculates power against uniformly random behavior as well as predictive success for each axiom at any given efficiency level. The commands are illustrated using experimental individual-level data and aggregated household-level consumption data.

Keywords: Rpaxioms; Checkax; Aei; Powerps; Afriat effciency index; GARP; Revealed preference; Power; Predictive success

JEL-codes: C87; D12

21 pages, First version: June 15, 2020. Revised: November 24, 2020.

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