Errors of Approximation and Errors of Aggregation in an Almost Ideal Demand System

A common assumption implicit in the literature on aggregation error in consumer demand theory is that micro relations are exact. Attention is thus focused solely on the errors introduced when one assumes that a micro relation holds at the macro level. We consider the Almost Ideal Demand System in this note and show that in fact the errors of approximation at the micro level and the errors of aggregation at the macro level are of the same order of magnitude.

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Year of publication:	1997-06
Authors:	Denton, Frank T. ; Mountain, Dean C. ; Spencer, Byron G.
Institutions:	Department of Economics, McMaster University
Subject:	almost ideal demand system \| errors of approximation \| errors of aggregation

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Series:	Quantitative Studies in Economics and Population Research Reports.
Type of publication:	Book / Working Paper
Notes:	10 pages
Classification:	D11 - Consumer Economics: Theory
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005405503