Models of Aggregate Economic Relationships that Account for Heterogeneity

Richard Blundell () and Thomas M. Stoker

Chapter 68 in Handbook of Econometrics, 2007, vol. 6A from Elsevier

Abstract: This chapter covers recent solutions to aggregation problems in three application areas: consumer demand analysis, consumption growth and wealth, and labor participation and wages. Each area involves treatment of heterogeneity and nonlinearity at the individual level. Three types of heterogeneity are highlighted: heterogeneity in individual tastes, heterogeneity in income and wealth risks, and heterogeneity in market participation. Work in each area is illustrated using results from empirical data. The overall aim is to present specific models that connect individual behavior with aggregate statistics, as well as to discuss the principles for constructing such models.

JEL-codes: C39 (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (9)

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