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Empirical modelling of the aggregation error in the representative consumer model

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  • Camilo Sarmiento
  • Richard Just

Abstract

This paper examines different approaches to modelling the aggregation error associated with the representative consumer model. Each approach is based on an analytical framework intended for modelling aggregate time series data on quantities and prices with potential additional measures of income distribution. Simple functions that track aggregation error over time are found to perform better than more complex and theoretically sophisticated models. An explanation is given based on typical time series characteristics of economic data.

Suggested Citation

  • Camilo Sarmiento & Richard Just, 2005. "Empirical modelling of the aggregation error in the representative consumer model," Applied Economics, Taylor & Francis Journals, vol. 37(10), pages 1163-1175.
    • Handle: RePEc:taf:applec:v:37:y:2005:i:10:p:1163-1175
    DOI: 10.1080/00036840500123101
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