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A new characterization of consumer heterogeneity in a growing economy

Author

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  • Maebayashi, Noritaka
  • Murahara, Hideki

Abstract

Caselli and Ventura (2000) introduced various sources of consumer heterogeneity, while studying changes in consumption, assets, income distributions, and preferences for public services and focusing on their average values to determine the features of the representative economic behavior. Based on this model, we propose a new approach that features the economic behavior of heterogeneous consumers. We introduce the view of direction vectors representing the principal components derived from the main sources of consumer heterogeneity rather than considering their average values. We expect that our progressive approach will provide us with further insight into the essence of what we have been hitherto considering from an average perspective.

Suggested Citation

  • Maebayashi, Noritaka & Murahara, Hideki, 2022. "A new characterization of consumer heterogeneity in a growing economy," MPRA Paper 114887, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:114887
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    References listed on IDEAS

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    1. Turnovsky, Stephen J. & Garci­a-Peñalosa, Cecilia, 2008. "Distributional dynamics in a neoclassical growth model: The role of elastic labor supply," Journal of Economic Dynamics and Control, Elsevier, vol. 32(5), pages 1399-1431, May.
    2. Jaume Ventura, 1997. "Growth and Interdependence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(1), pages 57-84.
    3. Jaume Ventura & Francesco Caselli, 2000. "A Representative Consumer Theory of Distribution," American Economic Review, American Economic Association, vol. 90(4), pages 909-926, September.
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    More about this item

    Keywords

    consumer heterogeneity; direction vectors to characterize the economy with heterogeneous agents;

    JEL classification:

    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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