A QUADRATIC ENGEL CURVE DEMAND MODEL (squaring with the representative consumer)

This paper starts with some reflections on the notion of the representative consumer. These reflections result in the conclusion that the "average consumer" is - in general - not a representative consumer in the sense that he may be considered as a (fictitious) consumer acting in the same way as the individual consumers are supposed to do, i.e. maximizing their utility subject to a budget constraint. Nevertheless, relations between per capita consumption on the one hand and income and prices on the other hand, may be such that, though being non-linear in income, they are "aggregation consistent". This is at the cost of more information on incomes. Here we used a time series of the coefficients of variation of the income distribution in the Netherlands, leading to a Quadratic Engel Curve (Q.E.C.) demand system.


Issue Date:
1979
Publication Type:
Working or Discussion Paper
DOI and Other Identifiers:
Record Identifier:
https://ageconsearch.umn.edu/record/272179
Language:
English
Total Pages:
37
Series Statement:
REPORT 7911/E




 Record created 2018-04-25, last modified 2020-10-28

Fulltext:
Download fulltext
PDF

Rate this document:

Rate this document:
1
2
3
 
(Not yet reviewed)