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A QUADRATIC ENGEL CURVE DEMAND MODEL (squaring with the representative consumer)

Author

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  • van Daal, J.
  • Louter, A. S.

Abstract

This paper starts with some reflections on the notion of the representative consumer. These reflections result in the conclusion that the "average consumer" is - in general - not a representative consumer in the sense that he may be considered as a (fictitious) consumer acting in the same way as the individual consumers are supposed to do, i.e. maximizing their utility subject to a budget constraint. Nevertheless, relations between per capita consumption on the one hand and income and prices on the other hand, may be such that, though being non-linear in income, they are "aggregation consistent". This is at the cost of more information on incomes. Here we used a time series of the coefficients of variation of the income distribution in the Netherlands, leading to a Quadratic Engel Curve (Q.E.C.) demand system.

Suggested Citation

  • van Daal, J. & Louter, A. S., 1979. "A QUADRATIC ENGEL CURVE DEMAND MODEL (squaring with the representative consumer)," Econometric Institute Archives 272179, Erasmus University Rotterdam.
    • Handle: RePEc:ags:eureia:272179
    DOI: 10.22004/ag.econ.272179
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    References listed on IDEAS

    as
    1. Somermeyer, W. H. & Langhout, A., 1972. "Shapes of Engel curves and demand curves: Implications of the expenditure allocation model, applied to Dutch data," European Economic Review, Elsevier, vol. 3(3), pages 351-386, November.
    2. BARTEN, Anton P., 1969. "Maximum likelihood estimation of a complete system of demand equations," LIDAM Reprints CORE 34, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    3. Barten, A. P., 1969. "Maximum likelihood estimation of a complete system of demand equations," European Economic Review, Elsevier, vol. 1(1), pages 7-73.
    4. Keller, Wouter J., 1977. "Savings liesure, consumption and taxes: The household expenditure system," European Economic Review, Elsevier, vol. 9(2), pages 151-167.
    5. Blackorby, Charles & Boyce, Richard & Russell, R Robert, 1978. "Estimation of Demand Systems Generated by the Gorman Polar Form: A Generalization of the S-Branch Utility Tree," Econometrica, Econometric Society, vol. 46(2), pages 345-363, March.
    6. Brown, Murray & Heien, Dale M, 1972. "The S-Branch Utility Tree: A Generalization of the Linear Expenditure System," Econometrica, Econometric Society, vol. 40(4), pages 737-747, July.
    7. Muellbauer, John, 1976. "Community Preferences and the Representative Consumer," Econometrica, Econometric Society, vol. 44(5), pages 979-999, September.
    8. John Muellbauer, 1975. "Aggregation, Income Distribution and Consumer Demand," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 42(4), pages 525-543.
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