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Aggregation without the aggravation? Nonparametric analysis of the representative consumer

Author

Listed:
  • Laurens Cherchye

    (Institute for Fiscal Studies and Katholieke Universiteit Leuven)

  • Ian Crawford

    (Institute for Fiscal Studies and Nuffield College, Oxford)

  • Bram De Rock

    (Institute for Fiscal Studies and Université libre de Bruxelles)

  • Frederic Vermeulen

    (Institute for Fiscal Studies and University of Leuven)

Abstract

In the tradition of Afriat (1967), Diewert (1973) and Varian (1982), we provide a revealed preference characterisation of the representative consumer. Our results are simple and complement those of Gorman (1953, 1961), Samuelson (1956) and others. They can also be applied to data very readily and without the need for auxiliary parametric or statistical assumptions. We investigate the application of our characterisation by means of a balanced microdata panel survey. Our findings provide robust evidence against the existence of a representative consumer for our data.

Suggested Citation

  • Laurens Cherchye & Ian Crawford & Bram De Rock & Frederic Vermeulen, 2012. "Aggregation without the aggravation? Nonparametric analysis of the representative consumer," CeMMAP working papers CWP03/12, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
    • Handle: RePEc:ifs:cemmap:03/12
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    File URL: http://cemmap.ifs.org.uk/wps/cwp031212.pdf
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    Cited by:

    1. Cherchye, Laurens & Demuynck, Thomas & De Rock, Bram, 2015. "Is utility transferable? a revealed preference analysis," Theoretical Economics, Econometric Society, vol. 10(1), January.
    2. Koulovatianos, Christos & Schröder, Carsten & Schmidt, Ulrich, 2014. "Do demographics prevent consumer aggregates from reflecting micro-level preferences?," CFS Working Paper Series 484, Center for Financial Studies (CFS).
    3. Kannai, Yakar & Selden, Larry & Wei, Xiao, 2014. "Myopic separability," Journal of Economic Behavior & Organization, Elsevier, vol. 103(C), pages 125-144.
    4. Maria Porter & Abi Adams, 2016. "For Love or Reward? Characterising Preferences for Giving to Parents in an Experimental Setting," Economic Journal, Royal Economic Society, vol. 126(598), pages 2424-2445, December.
    5. Koulovatianos, Christos & Schröder, Carsten & Schmidt, Ulrich, 2010. "Confronting the representative consumer with household-size heterogeneity," Kiel Working Papers 1663, Kiel Institute for the World Economy (IfW Kiel).

    More about this item

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • D30 - Microeconomics - - Distribution - - - General
    • D60 - Microeconomics - - Welfare Economics - - - General
    • E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General

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