Aggregate Behavior and Microdata
It is shown how one can effectively use microdata in modelling the change over time in an aggregate (e.g. mean consumption expenditure) of a large and heterogeneous population. The starting point of our aggregation analysis is a specification of explanatory variables on the micro-level. Typically, some of these explanatory variables are observable and others are unobservable. Based on certain hypotheses on the evolution over time of the joint distributions across the population of these explanatory variables we derive a decomposition of the change in the aggregate which allows a partial analysis: to isolate and to quantify the effect of a change in the observable explanatory variables. This analysis does not require an explicit treatment of the unobservable variables.
|Date of creation:||Feb 2004|
|Date of revision:||Jun 2004|
|Contact details of provider:|| Postal: Bonn Graduate School of Economics, University of Bonn, Adenauerallee 24 - 26, 53113 Bonn, Germany|
Fax: +49 228 73 6884
Web page: http://www.bgse.uni-bonn.de
References listed on IDEAS
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- Lewbel, Arthur, 1990. "Income distribution movements and aggregate money illusion," Journal of Econometrics, Elsevier, vol. 43(1-2), pages 35-42.
- Blundell, Richard & Stoker, Thomas M., 2007. "Models of Aggregate Economic Relationships that Account for Heterogeneity," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 6, chapter 68 Elsevier.
- Stoker, Thomas M, 1993. "Empirical Approaches to the Problem of Aggregation Over Individuals," Journal of Economic Literature, American Economic Association, vol. 31(4), pages 1827-74, December.
- Arthur Lewbel, 1992. "Aggregation with Log-Linear Models," Review of Economic Studies, Oxford University Press, vol. 59(3), pages 635-642.
- Haerdle,Wolfgang & Stoker,Thomas, 1987. "Investigations smooth multiple regression by the method of average derivatives," Discussion Paper Serie A 107, University of Bonn, Germany.
- Davidson, James E H, et al, 1978. "Econometric Modelling of the Aggregate Time-Series Relationship between Consumers' Expenditure and Income in the United Kingdom," Economic Journal, Royal Economic Society, vol. 88(352), pages 661-92, December.
- Malinvaud, Edmond, 1993. "A framework for aggregation theories," Ricerche Economiche, Elsevier, vol. 47(2), pages 107-135, June.
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