In many cases, heterogeneous prices occur in price-taking environments. In empirical work, an aggregate price index is often created from such prices and used to explain aggregate supply and derived demands. The authors show that consistent aggregation places strong restrictions on functional...

This chapter presents the theory of consumer choice as applied to household behavior. An internally consistent, self-contained framework is developed for the analysis of consumer preferences, household production, quality attributes, and produced nonmarket commodities in static and dynamic...

An exactly aggregable system of Gorman Engel curves for US food consumption is developed and implemented. Box-Cox transformations on prices and income nest functional form. The model nests rank up to rank three. The model is estimated by nonlinear three-stage least squares with annual time...