Confronting the Representative Consumer with Household-Size Heterogeneity

Christos Koulovatianos, Carsten Schröder and Ulrich Schmidt ()
Additional contact information
Ulrich Schmidt: IFW, University of Kiel

DEM Discussion Paper Series from Department of Economics at the University of Luxembourg

Abstract: Most simulated micro-founded macro models use solely consumer-demand aggregates in order to estimate deep economy-wide preference parameters, which are useful for policy eva- luation. The underlying demand-aggregation properties that this approach requires, should be easy to empirically disprove: since household-consumption choices differ for households with more members, aggregation can be rejected if appropriate data violate an affine equa- tion regarding how much individuals benefit from within-household sharing of goods. We develop a survey method that tests the validity of this equation, without utility-estimation restrictions via models. Surprisingly, in six countries, this equation is not rejected, lending support to using consumer-demand aggregates.

Keywords: Linear Aggregation; Dynamic Representative Consumer; Household-Size Economies; Equivalent Income; Survey Method (search for similar items in EconPapers)
JEL-codes: C42 D11 D12 D31 D91 E01 E21 I32 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-mac and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://wwwen-archive.uni.lu/content/download/7322 ... %20Heterogeneity.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to wwwen-archive.uni.lu:443 (No such host is known. )

Related works:
Working Paper: Confronting the Representative Consumer with Household-Size Heterogeneity (2010)
Working Paper: Confronting the representative consumer with household-size heterogeneity (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:luc:wpaper:14-13

Access Statistics for this paper

More papers in DEM Discussion Paper Series from Department of Economics at the University of Luxembourg Contact information at EDIRC.
Bibliographic data for series maintained by Marina Legrand ().