Consumer-related policy decisions often require analysis of aggregate responses or mean elasticities. However, in practice these mean elasticities are seldom used. Mean elasticities can be approximated using aggregate data, but that introduces aggregation bias for full and compensated price...

We present a new class of social cost-of-living indices and a nonparametric framework for estimating these and other social cost-of-living indices. Common social cost-of-living indices can be understood as aggregator functions of approximations of individual cost-of-living indices. The Consumer...

Elasticity values calculated at the macro level are biased as estimates of micro elasticities, and vice versa. We derive convenient expressions for aggregation/disaggregation biases in an Almost Ideal Demand System. Using after-tax data we calculate income distribution parameters for seven...

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...

Policy analysis frequently requires estimates of aggregate (or mean) consumer elasticities. However, estimates are often made incorrectly, based on elasticity calculations at mean income. We provide in this paper an overall integrated analytical framework that encompasses these biases and...