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Errors of Approximation and Errors of Aggregation in an Almost Ideal Demand System

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Author Info
Frank T. Denton
Dean C. Mountain
Byron G. Spencer

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Abstract

A common assumption implicit in the literature on aggregation error in consumer demand theory is that micro relations are exact. Attention is thus focused solely on the errors introduced when one assumes that a micro relation holds at the macro level. We consider the Almost Ideal Demand System in this note and show that in fact the errors of approximation at the micro level and the errors of aggregation at the macro level are of the same order of magnitude.

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Publisher Info
Paper provided by McMaster University in its series Quantitative Studies in Economics and Population Research Reports with number 330.

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Length: 10 pages
Date of creation: Jun 1997
Date of revision:
Handle: RePEc:mcm:qseprr:330

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Related research
Keywords: almost ideal demand system; errors of approximation; errors of aggregation;

Find related papers by JEL classification:
D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory

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This page was last updated on 2009-11-19.


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