The Robustness of Checks for Consumer Choice Inconsistencies By JASON ABALUCK AND JONATHAN GRUBER* We explore the in- and out- of sample robustness of tests for consumer choice inconsistencies based on parameter restrictions in parametric models, with a focus

We explore the inand outof sample robustness of tests for consumer choice inconsistencies based on parameter restrictions in parametric models, with a focus on tests proposed by Ketcham, Kuminoff and Powers (KKP). We start by arguing that their non-parametric alternatives are inherently conservative with respect to detecting mistakes. We then show that our parametric model is robust to KKP’s suggested specification checks, and that comprehensive goodness of fit measures perform better with our alternative model. Finally, we explore the robustness of our 2011 results to alternative normative assumptions. This exchange highlights the key question of how to treat both brand fixed effects and unobservable plan differences in welfare comparisons of plan choice.