Aggregation Without the Aggravation? Nonparametric Analysis of the Representative Consumer

Cherchye, L.; Crawford, Ian; De Rock, Bram; Vermeulen, Frederic

doi:10.2139/ssrn.1974867

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)

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

There are 2 versions of this paper

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: 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