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See detailRevealed preference tests of collectively rational consumption behavior: formulations and algorithms
Talla Nobibon, Fabrice; Cherchye, Laurens; Crama, Yves ULg et al

E-print/Working paper (2013)

This paper focuses on revealed preference tests of the collective model of household consumption. We start by showing that the decision problems corresponding to testing collective rationality are {\sc np ... [more ▼]

This paper focuses on revealed preference tests of the collective model of household consumption. We start by showing that the decision problems corresponding to testing collective rationality are {\sc np}-complete. This makes the application of these tests problematic for (increasingly available) large(r) scale data sets. We then present two approaches to overcome this negative result. First, we introduce exact algorithms based on mixed-integer programming ({\sc mip}) formulations of the collective rationality tests, which can be usefully applied to medium sized data sets. Next, we propose simulated annealing heuristics, which allow for efficient testing of the collective model in the case of large data sets. We illustrate our methods by a number of computational experiments based on Dutch labor supply data. [less ▲]

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See detailAlgorithms for testing the collective consumption model
Talla Nobibon, Fabrice; Cherchye, Laurens; Crama, Yves ULg et al

Conference (2012, November 09)

In this talk, we discuss an extension of the strong axiom of revealed preferences to collective households. The question that we address is whether a set of observed consumption baskets can be decomposed ... [more ▼]

In this talk, we discuss an extension of the strong axiom of revealed preferences to collective households. The question that we address is whether a set of observed consumption baskets can be decomposed in such a way that each of the derived data sets reflects the choices of a “rational” (i.e., utility-maximizing) individual member of the household. Although testing revealed preference axioms on data generated by a single decisionmaker can be done in polynomial time, the extension to two-member households is NP-complete. We propose two algorithms for testing the collective consumption model on large data sets. The first one is an exact algorithm based on a new mixed-integer programming formulation, whereas the second one is a heuristic based on a simulated annealing procedure that solves a global optimization formulation of the problem. Computational experiments are performed on real-life data. [less ▲]

Detailed reference viewed: 16 (0 ULg)