In many countries, regional income inequality has followed an inverted U-shaped curve, growing during industrialisation and market integration and declining thereafter. By contrast, Sweden's regional inequality dropped from 1860 to 1980 and did not show this U-shaped pattern. Accordingly,...

This paper uses city-level data to examine the impact of a first wave of railroad construction in Sweden, between 1855 and 1870, from the 19th century until today. We estimate that railroads accounted for 50% of urban growth, 1855-1870. In cities with access to the railroad network, property...

Samuelson's (1938) weak (generalized) axiom of revealed preference- WGARP-is a minimal and appealing consistency condition of choice. We offer a rationalization of WGARP in general settings. Our main result is an exact analog of the celebrated Afriat's theorem, but for WGARP. Its ordinal...

The mixed-demand model allows for very flexible specification of what should be considered endogenous and exogenous in demand system estimation. This paper introduces a revealed preference framework to analyze the mixed-demand model. The proposed methods can be used to test whether observed data...

The Houtman-Maks index is a measure of the size of a violation of utility maximizing (i.e., rational) behavior. This note introduces the Stata command hmindex, which calculates the Houtman-Maks index for a data set of prices and observed choices of a consumer. The command is illustrated with an...

It is well-known that observed data on prices and quantities of a set of goods is consistent with rational choice if the data satisfy revealed preference. In this paper, we derive estimators for demand and substitution elasticities at the observed data points for datasets satisfying the Strong...

Swofford and Whitney (1987) investigated the validity of two types of assumptions that underlie the representative agent models of modern macroeconomics and monetary economics. These assumptions are utility maximization and weak or functional separability that is required for an economic...

Revealed preference tests are widely used in empirical applications of consumer rationality. These are static tests, and consequently, lack ability to handle measurement errors in the data. This paper extends and generalizes existing procedures that account for measurement errors in revealed...

This article provides a robust non-parametric approach to demand analysis based on a concept called homothetic efficiency. Homotheticity is a useful restriction or assumption but data rarely satisfy testable conditions. To overcome this problem, this article provides a way to estimate homothetic...

We provide two methods to compute the largest subset of a set of observations that is consistent with the Generalised Axiom of Revealed Preference. The algorithm provided by Houtman and Maks (1985) is not comput ationally feasible for larger data sets, while our methods are not limited in that...