Is utility transferable? A revealed preference analysis

L. Cherchye, T. Demuynck, B. de Rock

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3 Citations (Scopus)

Abstract

The transferable utility hypothesis underlies important theoretical results in household economics. We provide a revealed preference framework for bringing this (theoretically appealing) hypothesis to observational data. We establish revealed preference conditions that must be satisfied for observed household consumption behavior to be consistent with transferable utility. We also show that these conditions are testable by means of integer programming methods.

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Original languageEnglish
Pages (from-to)51-65
Number of pages15
JournalTheoretical Economics
Volume10
Issue number1
DOIs
Publication statusPublished - 1 Jan 2015

Keywords

  • Transferable utility hypothesis
  • generalized quasilinearity
  • household consumption
  • nonparametric tests
  • revealed preferences
  • NONPARAMETRIC APPROACH
  • PUBLIC-GOODS
  • CONSUMPTION
  • BEHAVIOR
  • THEOREM

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