Corpus ID: 11014285

Revealed Preference Tests using Supermarket Data: the Money Pump

  title={Revealed Preference Tests using Supermarket Data: the Money Pump},
  author={F. Echenique and SangMok Lee and M. Shum},
  • F. Echenique, SangMok Lee, M. Shum
  • Published 2010
  • Economics
  • We use a money pump argument to measure deviations from the revealed preference axioms. Using a panel data set of food expenditures, we find a large number of violations of the weak axiom of revealed preference. The money pump costs are small, which indicate that the violations of revealed preference are not severe. While most households' behavior deviates from rationality, by our measure they are close to being rational. 

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