A defence of revealed preference analysis

Abstract

The paper defends revealed preference analysis against the attack of Dan Hausman that RPA is unclear and has not empirical advantages. RPA is consistent with externalist accounts of the theory of mind where preference is interpreted and gets its meaning through our understanding of the actions of those studied. The paper argues that Hausman assumes the conclusion he is maintaining by assuming preference means "desire". RPA is unavoidable in empirical research where we interpret outcomes through the intentional actions of human beings and is especially important in aggregate-data analysis. One of the confusions of philosophical critiques of RPA is to treat aggregate "type" explanations as though they refer to each token individual within the type. It concludes with some thoughts on the ethical considerations of using RPA.