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How revealing is revealed preference?

Blundell, R.; (2005) How revealing is revealed preference? Journal of the European Economic Association , 3 (2-3) pp. 211-235. 10.1162/jeea.2005.3.2-3.211. Green open access

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Abstract

This lecture address the following two key criticisms of the empirical application of revealed preference theory: When the RP conditions do not reject, they do not provide precise predictions; and when they do reject, they do not help characterize the nature of irrationality or the degree/direction of changing tastes. Recent developments in the application of RP theory are shown to have rendered these criticisms unfounded. A powerful test of rationality is available that also provides a natural characterization of changing tastes. Tight bounds on demand responses and on the welfare costs of relative price and tax changes are also available and are shown to work well in practice.

Type: Article
Title: How revealing is revealed preference?
Open access status: An open access version is available from UCL Discovery
DOI: 10.1162/jeea.2005.3.2-3.211
Publisher version: http://dx.doi.org/10.1162/jeea.2005.3.2-3.211
Language: English
Additional information: Copyright Massachusetts Institute of Technology Press
Keywords: D11, D12, C14
UCL classification: UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics
URI: https://discovery.ucl.ac.uk/id/eprint/15851
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