Errors of Approximation and Errors of Aggregation in an Almost Ideal Demand System

Frank Denton, Dean Mountain () and Byron Spencer

Quantitative Studies in Economics and Population Research Reports from McMaster University

Abstract: A common assumption implicit in the literature on aggregation error in consumer demand theory is that micro relations are exact. Attention is thus focused solely on the errors introduced when one assumes that a micro relation holds at the macro level. We consider the Almost Ideal Demand System in this note and show that in fact the errors of approximation at the micro level and the errors of aggregation at the macro level are of the same order of magnitude.

Keywords: almost ideal demand system; errors of approximation; errors of aggregation (search for similar items in EconPapers)
JEL-codes: D11 (search for similar items in EconPapers)
Pages: 10 pages
Date: 1997-06
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Persistent link: https://EconPapers.repec.org/RePEc:mcm:qseprr:330

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