Template-Type: ReDIF-Paper 1.0
Title: The Representative Agent Hypothesis: An Empirical Test
Author-Name: Manisha Chakrabarty
Author-Name: Anke Schmalenbach
Author-Email: 
Classification-JEL: C12, C14, D12, E21
Keywords: Representative Agent Hypothesis, Time Invariance, Heterogeneity
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. 
Note: 
Length: 17
Creation-Date: 2002-10	
Revision-Date: 
File-URL: http://www.wiwi.uni-bonn.de/bgsepapers/bonedp/bgse26_2002.pdf
File-Format: application/pdf
Handle: RePEc:bon:bonedp:bgse26_2002