We present evidence from a natural field experiment designed to shed light on whether individual behavior is consistent with a neoclassical model of utility maximization subject to budget constraints. We do this through the lens of a field experiment on charitable giving. We find that the behavior of at least 80% of individuals, on both the extensive and intensive margins, can be rationalized within a standard neoclassical choice model in which individuals have preferences, defined over own consumption and their contribution towards the charitable good, satisfying the axioms of revealed preference.
Authors
CPP Director, IFS Research Director
Imran is Professor of Economics at University College London and Director of the Centre for the Microeconomic Analysis of Public Policy at the IFS.
Steffen Huck
Maja Adena
Journal article details
- Publisher
- The IFS
- Issue
- Volume 3, Issue 2, November 2017, pages 89-108
Suggested citation
M, Adena and S, Huck and I, Rasul. (2017). 'Testing Consumer Theory: Evidence from a Natural Field Experiment' 3(2/2017), pp.89–108.
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