Metonymy and Cross Section Demand
AbstractCross section consumer expenditure data are frequently used to make conclusions about consumer demand behavior. Such conclusions, however, can only be justified under certain assumptions, which are often left unstated in the empirical demand literature. An assumption of this type, the metonymy hypothesis, was stated rigorously and then exploited by Hardle, Hildenbrand and Jerison when analyzing the monotonicity property of aggregate demand functions. The purpose of the present paper is to examine the metonymy hypothesis in more detail. We prove that the distribution of demand vectors derived from a not necessarily metonymic population is identical to the distribution derived from some metonymic one. This implies, in particular, that the metonymy hypothesis cannot be rejected or confirmed on the basis of data from a single cross section.
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Bibliographic InfoPaper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 1996046.
Date of creation: 01 Sep 1996
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Cross section demand; Consumer expenditure data; Metonymy hypothesis; Law of Demand;
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- HARDLE, Wolfgang & HILDENBRAND, Werner & JERISON, Michael, .
"Empirical evidence on the law of demand,"
CORE Discussion Papers RP
-968, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Haerdle,W. Hildenbrand,W. Jerison,M., 1988. "Empirical evidence on the law of demand," Discussion Paper Serie A 193, University of Bonn, Germany.
- Wolfgang Härdle & Werner Hildenbrand & Michael Jerison, 1989. "Empirical Evidence on the Law of Demand," Discussion Paper Serie A 264a, University of Bonn, Germany.
- Hildenbrand, Werner, 1983. "On the "Law of Demand."," Econometrica, Econometric Society, vol. 51(4), pages 997-1019, July.
- Michael Jerison, 2001. "Demand Dispersion, Metonymy and Ideal Panel Data," Discussion Papers 01-11, University at Albany, SUNY, Department of Economics.
- Michael Jerison & John K.-H. Quah, 2006. "Law of Demand," Discussion Papers 06-07, University at Albany, SUNY, Department of Economics.
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