Aggregation Without the Aggravation? Nonparametric Analysis of the Representative Consumer

CentER Discussion Paper No. 2011-143

23 Pages Posted: 20 Dec 2011

See all articles by L. Cherchye

L. Cherchye

KU Leuven; Erasmus Research Institute of Management (ERIM)

Ian Crawford

Institute for Fiscal Studies (IFS)

Bram De Rock

Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES)

Frederic Vermeulen

Tilburg University - CentER; IZA Institute of Labor Economics

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Date Written: December 20, 2011

Abstract

In the tradition of Afriat (1967), Diewert (1973) and Varian (1982), we provide a revealed reference characterization of the representative consumer. Our results are simple and complement those of Gorman (1953, 1961), Samuelson (1956) and others. They can also be applied to data very readily and without the need for auxiliary parametric or statistical assumptions. We investigate the application of our characterization by means of a balanced microdata panel survey. Our findings provide robust evidence against the existence of a representative consumer for our data.

Keywords: revealed preference, aggregation, Gorman Polar Form, GARP

JEL Classification: D10, D30, D60, E10

Suggested Citation

Cherchye, Laurens and Crawford, Ian and De Rock, Bram and Vermeulen, Frederic, Aggregation Without the Aggravation? Nonparametric Analysis of the Representative Consumer (December 20, 2011). CentER Discussion Paper No. 2011-143, Available at SSRN: https://ssrn.com/abstract=1974867 or http://dx.doi.org/10.2139/ssrn.1974867

Laurens Cherchye (Contact Author)

KU Leuven ( email )

Oude Markt 13
Leuven, Vlaams-Brabant
Belgium

Erasmus Research Institute of Management (ERIM)

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Ian Crawford

Institute for Fiscal Studies (IFS) ( email )

7 Ridgmount Street
London, WC1E 7AE
United Kingdom

Bram De Rock

Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES) ( email )

Av. F. D. Roosevelt, 50
CP 114
Brussels, B-1050
Belgium

Frederic Vermeulen

Tilburg University - CentER ( email )

P.O. Box 90153
5000 LE Tilburg
Netherlands
+31 13 466 3196 (Phone)

HOME PAGE: http://center.uvt.nl/staff/vermeulen/

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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