The Construction of Separable Utility Functions from Expenditure Data

Afriat, S. N.

doi:10.1093/acprof:oso/9780199670581.003.0010

Cited by 8 publications

(10 citation statements)

References 5 publications

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“…Interestingly, it is possible to empirically check this weak separability structure. See, for example, Afriat (1969);Varian (1983); Diewert and Parkan (1985) and Cherchye, Demuynck, De Rock, and Hjertstrand (2014) for revealed preference conditions that are similar in nature to the conditions (for normality) that we establish below.…”

Section: Introductionmentioning

confidence: 80%

Normality of Demand in a Two-Goods Setting

2016

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We study the testable implications of normal demand in a two-goods setting. For a finite dataset on prices and quantities, we present the revealed preference conditions for normality of one or both goods. Our characterization provides an intuitive extension of the well-known Weak Axiom of Revealed Preference, and is easy to use in practice. We illustrate the empirical relevance of our theoretical results through an application to the experimental dataset presented in Andreoni and Miller (2002).

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Section: Introductionmentioning

confidence: 80%

Normality of Demand in a Two-Goods Setting

2016

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“…For example, it allows researchers to focus on individual markets for related goods and, combined with (quasi-)homotheticity, it also implies two stage budgeting, which simplifies the analysis of consumer behaviour. Varian (1983) presents the revealed preference characterizations of both weak and additive separability; see also Afriat (1969) and Diewert and Parkan (1985) for related results. Crawford (2004) contains the revealed preference characterization of latent separability.…”

Section: Investigating Functional Formsmentioning

confidence: 97%

Empirical Revealed Preference

Crawford

Rock

2014

Annu. Rev. Econ.

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This article aims to provide an introduction to empirical revealed preference (RP) and an overview of the current state of the field. We hope to give a sense of how RP methods work and the types of questions they can address and to assess the strengths and drawbacks of the approach. After briefly recapping the basics of RP theory, we review and critically assess the literature in two main areas representing the principal fields in which recent research has made significant advances: broadening the scope of RP methods and dealing with empirical issues related to bringing RP to the data. We conclude with a discussion of some future directions.

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“…Following his paper on general utility functions, Afriat also wrote an unpublished work on separable utility functions (Afriat, 1967b). Varian (1983) built further on this, giving a non-linear system of inequalities, reproduced below in Theorem 5, for which the existence of a solution is a necessary and sufficient condition for rationalizability by a well-behaved, weakly separable utility function with R = 2 sets of goods.…”

Section: Definition 12 Weakly Separable Utility Functionsmentioning

confidence: 99%

Revealed preference theory: An algorithmic outlook

Smeulders

Crama

Spieksma

2019

European Journal of Operational Research

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Revealed preference theory is a domain within economics that studies rationalizability of behavior by (certain types of) utility functions. Given observed behavior in the form of choice data, testing whether certain conditions are satisfied gives rise to a variety of computational problems that can be analyzed using operations research techniques. In this survey, we provide an overview of these problems, their theoretical complexity, and available algorithms for tackling them. We focus on consumer choice settings, in particular individual choice, collective choice and stochastic choice settings.

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The Construction of Separable Utility Functions from Expenditure Data

Cited by 8 publications

References 5 publications

Normality of Demand in a Two-Goods Setting

Normality of Demand in a Two-Goods Setting

Empirical Revealed Preference

Revealed preference theory: An algorithmic outlook

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