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Bonn Econ Discussion Papers, Bonn Graduate School of Economics (BGSE), Universität Bonn >
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http://hdl.handle.net/10419/22847
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| Title: | | The Representative Agent Hypothesis: An Empirical Test  |
| Authors: | | Chakrabarty, Manisha Schmalenbach, Anke |
| Issue Date: | | 2002 |
| Series/Report no.: | | Bonn econ discussion papers 2002,26 |
| Abstract: | | 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. |
| Subjects: | | Representative Agent Hypothesis Time Invariance Heterogeneity |
| JEL: | | D12 C14 C12 E21 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Bonn Econ Discussion Papers, Bonn Graduate School of Economics (BGSE), Universität Bonn
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