Resource title

The Representative Agent Hypothesis: An Empirical Test

Resource image

image for OpenScout resource :: The Representative Agent Hypothesis: An Empirical Test

Resource description

This paper empirically tests the validity of using only mean income as a representative variable for the whole population in the aggregate consumption relation and of assuming time-invariance of the coefficients in this relation, as done in macromodels. We use a statistical distributional approach of aggregation to test these properties on the UK-Family Expenditure Survey [1974-1993]. It is observed that the time-invariance assumption is rejected in most cases. A bootstrap test also suggests that in addition to mean income, the dispersion of income matters significantly for the commodity group services in several years and for clothing & footwear and total nondurable in some years, thus invalidating the representative agent hypothesis.

Resource author

Manisha Chakrabarty, Anke Schmalenbach

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/22847

Resource license

Adapt according to the presented license agreement and reference the original author.