Modern consumer theories are built upon the premise of the forward looking behavior of households. While most of the empirical studies at micro level are based on Euler equation, there have been few to estimate the household consumption function and test the implication of forward looking...

This paper attempts to provide empirical evidence of the positive definiteness of the mean income effect matrix, a sufficient condition for market demand to satisfy the law of demand derived by Härdle, Hildenbrand and Jerison [HHJ(1991)]. Increasing heterogeneity in spending of populations of...