Accounting for household heterogeneity in general equilibrium economic growth models
We describe and evaluate a new method of aggregating heterogeneous households that allows for the representation of changing demographic composition in a multi-sector economic growth model. The method is based on a utility and labor supply calibration that takes into account time variations in demographic characteristics of the population. We test the method using the Population-Environment-Technology (PET) model by comparing energy and emissions projections employing the aggregate representation of households to projections representing different household types explicitly. Results show that the difference between the two approaches in terms of total demand for energy and consumption goods is negligible for a wide range of model parameters. Our approach allows the effects of population aging, urbanization, and other forms of compositional change on energy demand and CO2 emissions to be estimated and compared in a computationally manageable manner using a representative household under assumptions and functional forms that are standard in economic growth models.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jaume Ventura & Francesco Caselli, 2000.
"A Representative Consumer Theory of Distribution,"
American Economic Review,
American Economic Association, vol. 90(4), pages 909-926, September.
- Caselli, G & Ventura, J, 1996. "A Representative Consumer Theory of Distribution," Papers 534, Harvard - Institute for International Development.
- Caselli, F. & Ventura, J., 1996. "A Representative Consumer Theory of Distribution," Working papers 96-11, Massachusetts Institute of Technology (MIT), Department of Economics.
- Timothy J. Kehoe, 1990.
"Computation and Multiplicity of Equilibria,"
Discussion Paper Serie A
309, University of Bonn, Germany.
- Sebastian Rausch & Thomas Rutherford, 2010.
"Computation of Equilibria in OLG Models with Many Heterogeneous Households,"
Society for Computational Economics, vol. 36(2), pages 171-189, August.
- Sebastian Rausch & Thomas F. Rutherford, 2007. "Computation of Equilibria in OLG Models with Many Heterogeneous Households," Ruhr Economic Papers 0015, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
- Sebastian Rausch & Thomas F. Rutherford, 2008. "Computation of Equilibria in OLGModels with Many Heterogeneous Households," CER-ETH Economics working paper series 08/90, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
- Dalton, Michael & O'Neill, Brian & Prskawetz, Alexia & Jiang, Leiwen & Pitkin, John, 2008. "Population aging and future carbon emissions in the United States," Energy Economics, Elsevier, vol. 30(2), pages 642-675, March.
- Ray C. Fair & John B. Taylor, 1980.
"Solution and Maximum Likelihood Estimation of Dynamic Nonlinear Rational Expectations Models,"
Cowles Foundation Discussion Papers
564, Cowles Foundation for Research in Economics, Yale University.
- Fair, Ray C & Taylor, John B, 1983. "Solution and Maximum Likelihood Estimation of Dynamic Nonlinear Rational Expectations Models," Econometrica, Econometric Society, vol. 51(4), pages 1169-85, July.
- Ray C. Fair & John B. Taylor, 1980. "Solution and Maximum Likelihood Estimation of Dynamic Nonlinear RationalExpectations Models," NBER Technical Working Papers 0005, National Bureau of Economic Research, Inc.
- Fehr, Hans & Jokisch, Sabine & Kotlikoff, Laurence J., 2008.
"Fertility, mortality and the developed world's demographic transition,"
Journal of Policy Modeling,
Elsevier, vol. 30(3), pages 455-473.
- Hans Fehr & Sabine Jokisch & Laurence Kotlikoff, 2004. "Fertility, Mortality, and the Developed World’s Demographic Transition," CESifo Working Paper Series 1326, CESifo Group Munich.
- John Creedy & Ross Guest, 2006.
"Population Ageing And Intertemporal Consumption: Representative Agent Versus Social Planner,"
Department of Economics - Working Papers Series
972, The University of Melbourne.
- Creedy, John & Guest, Ross, 2008. "Population ageing and intertemporal consumption: Representative agent versus social planner," Economic Modelling, Elsevier, vol. 25(3), pages 485-498, May.
- Manne, Alan & Mendelsohn, Robert & Richels, Richard, 1995. "MERGE : A model for evaluating regional and global effects of GHG reduction policies," Energy Policy, Elsevier, vol. 23(1), pages 17-34, January.
When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:34:y:2012:i:5:p:1475-1483. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.