External and internal consistency of choices made in convex time budgets

We evaluate data on choices made from convex time budgets (CTB) in Andreoni and Sprenger (Am Econ Rev 102(7):3333-3356, 2012a) and Augenblick et al. (Q J Econ 130(3):1067-1115, 2015), two influential studies that proposed and applied this experimental technique. We use the weak axiom of revealed preference (WARP) to test for external consistency relative to pairwise choice, and demand, wealth and impatience monotonicity to test for internal consistency. We find that choices made by subjects in the original Andreoni and Sprenger (Am Econ Rev 102(7):3333-3356, 2012a) paper violate WARP frequently; violations of all three internal measures of monotonicity are concentrated in subjects who take advantage of the novel feature of CTB by making interior choices. Wealth monotonicity violations are more prevalent and pronounced than either demand or impatience monotonicity violations. We substantiate the importance of our desiderata of choice consistency in examining effort allocation choices made in Augenblick et al. (Q J Econ 130(3):1067-1115, 2015), where we find considerably more demand monotonicity violations, as well as many classical monotonicity violations which are associated with time inconsistent behavior. We believe that the frequency and magnitude of WARP and monotonicity violations found in the two studies pose important confounds for interpreting and structurally estimating choice patterns elicited through CTB. We encourage researchers employing CTB in present and future experiments to include consistency tests in their design and pre-estimation analysis.