Heterogeneity biases, distributional effects, and aggregate consumption: An empirical analysis using stratified microdata (replication data)

DOI

Using stratified microdata from the Canadian FAMEX (78-86) surveys, this paper investigates whether observed heterogeneity in marginal propensities to consume across strata actually hinders the aggregation process. Despite significant heterogeneity in marginal responses, the divergences between aggregate predicted consumption and the predictions from a model that uses average strata responses are found to be small, whenever the strata demands are approximatively linear at the mean and the commodity group considered is not a luxury good. On the other hand, some cross-sectional estimates obtained by pooling the strata are shown to be contaminated by unwanted cross-moments. Further, the analysis reconciles the fact that while there exists significant heterogeneity in consumer demands, the related distributional effects in the aggregate equation have not been found to be important.

Identifier
DOI https://doi.org/10.15456/jae.2022313.1131807904
Metadata Access https://www.da-ra.de/oaip/oai?verb=GetRecord&metadataPrefix=oai_dc&identifier=oai:oai.da-ra.de:776464
Provenance
Creator Fortin, Nicole M.
Publisher ZBW - Leibniz Informationszentrum Wirtschaft
Publication Year 1995
Rights Creative Commons Attribution 4.0 (CC-BY); Download
OpenAccess true
Contact ZBW - Leibniz Informationszentrum Wirtschaft
Representation
Language English
Resource Type Collection
Discipline Economics