Welfare, Volume 1
Aggregate Consumer Behavior
This volume presents a new approach to econometric modeling of aggregate consumer behavior. The approach has successfully extricated demand modeling from the highly restrictive framework provided for more than half a century by the model of a representative consumer. Like the representative consumer model that preceded it, the new approach rests on the theory of individual behavior. The centerpiece of the volume is an econometric model of demand obtained by aggregating over a population of utility-maximizing consumers.
The essential innovation is to incorporate attributes of consumers reflecting heterogeneous preferences into a model of aggregate behavior. Heterogeneity is captured by allowing preferences to depend on the demographic characteristics of households. This model unifies the two principal streams of empirical research on consumer behavior by pooling aggregate time series with cross-section data for individual households and provides a new point of departure for future research.
HardcoverOut of Print ISBN: 9780262100625 574 pp. | 6.25 in x 9.25 in
Aggregate Consumer Behavior is an important book for economists who share Jorgenson's passion for pushing the limitations of their profession. It is for those interested in alternatives to the ubiquitous representative agent approach, in more flexible functional forms, in seeing greater use made of demographic information along with the traditional price and income variables, and in strategies for pooling aggregate time series and individual cross sections. This is a book that will be important for generations of future scholars.
W. Erwin Diewert
Professor of Economics, University of British Columbia
This impressive volume contains all of the major writings by Jorgenson and his students on the popular Translog model of aggregate consumer demand. It provides a comprehensive description of the conditions needed for aggregation and the implementation of these conditions for the study of pooled cross section and time series data. It is an essential reference for those interested in the measurement of consumer demand and consumer welfare.
University College London and Institute for Fiscal Studies
Dale W. Jorgenson's contributions to consumer and welfare economics collected in these volumes represent a very impressive achievement in the way they combine economic theory, theoretical and applied econometrics, statistics, and empirical work with actual macro and micro data. His work certainly has become a considerable source of inspiration to economists and econometricians working in these areas, and I am sure they will inspire future generations as well.
Professor of Economics, University of Oslo