The aim of this paper is to assess the importance of using micro-level data in the econometric analysis of consumer demand. To do this we utilize a time series of repeated cross sections covering some 4000 households in each of 15 years. Employing a number of different aggregation procedures, we conclude that aggregate data alone are unlikely to produce reliable estimates of structural price and income coefficients. However, once certain 'aggregation factors' as well as trend and seasonal components are included, an aggregate model is not necessarily outperformed across all demand equations in terms of forecasting ability.
Authors
Richard Blundell
CPP Co-Director
Richard is Co-Director of the Centre for the Microeconomic Analysis of Public Policy (CPP) and Senior Research Fellow at IFS.
Guglielmo Weber
Research Associate University of Padua
Guglielmo is a Research Associate at the IFS and Professor in the Department of Economics at the Faculty of Statistics, Padua University.
Panos Pashardes
Journal article details
- JEL
- D12, C52, C31
- Issue
- September 1993
Suggested citation
R, Blundell and P, Pashardes and G, Weber. (1993). 'What do we learn about consumer demand patterns from micro-data?' (1993)
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