Aggregation with price variation and heterogeneity across consumers

Bente Halvorsen and Bodil M. Larsen ()
Additional contact information
Bodil M. Larsen: Statistics Norway, https://www.ssb.no/en/forskning/ansatte

Discussion Papers from Statistics Norway, Research Department

Abstract: In the aggregation literature, prices and price and income derivatives are often assumed not to vary across consumers. These assumptions may not be fulfilled: prices often vary and consumers are heterogeneous in the way they respond to price and income changes. In this paper we develop and illustrate a framework for consistent aggregation over consumers within an Almost Ideal Demand System (AIDS) model where prices, total expenditure and the response to these variables vary across consumers. We show how the frameworks previously discussed in the literature on aggregation of an AIDS model may be written as a special case within this general framework. The method may easily be adapted to any functional form.

Keywords: Aggregation; Consumer demand; Heterogeneity (search for similar items in EconPapers)
JEL-codes: D1 (search for similar items in EconPapers)
Date: 2006-11
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.ssb.no/a/publikasjoner/pdf/DP/dp489.pdf (application/pdf)

Related works:
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:ssb:dispap:489

Access Statistics for this paper

More papers in Discussion Papers from Statistics Norway, Research Department P.O.Box 8131 Dep, N-0033 Oslo, Norway. Contact information at EDIRC.
Bibliographic data for series maintained by L Maasø ().