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Column: Many Hoosiers say they’d like to move, but few do




A basic assumption of economics is the “axiom of revealed preference.” This is fundamental to economic analysis and distinguishes it from other branches of the social sciences.

In a nutshell, the axiom says: “What someone does tells us more about what they value than what they say.” Interesting, it is similar to what (we) learned in Sunday school back in Oklahoma — talk is cheap; actions are what matter.

For a mundane example, suppose a friend tells you he really prefers black coffee to coffee with cream. OK, but you observe at coffee break he always adds creamer to his coffee. What are you to conclude about his “true” preferences? Economists argue he reveals by his actions his preference for cream in his coffee.

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