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  3. Journal of Economic Literature
  4. June 2005
  5. Heterogeneity and Aggregation

Journal of Economic Literature

ISSN 0022-0515 (Print) | ISSN 2328-8175 (Online)

Heterogeneity and Aggregation

  • Richard Blundell
  • Thomas M. Stoker
Journal of Economic Literature
vol. 43, no. 2, June 2005
(pp. 347–391)
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Abstract

This survey covers recent solutions to aggregation problems in three application areas, consumer demand analysis, consumption growth and wealth, and labor participation and wages. Each area involves treatment of heterogeneity and nonlinearity at the individual level. Three types of heterogeneity are highlighted: heterogeneity in individual tastes, heterogeneity in income and wealth risks and heterogeneity in market participation. Work in each area is illustrated using results from empirical data. The overall aim is to show how concerns faced by empirical researchers regarding aggregation can be addressed.

Citation

Blundell, Richard, and Thomas M. Stoker. 2005. "Heterogeneity and Aggregation." Journal of Economic Literature, 43 (2): 347–391. DOI: 10.1257/0022051054661486

JEL Classification

  • C43 Index Numbers and Aggregation; Leading indicators
  • E00 Macroeconomics and Monetary Economics: General
  • E21 Macroeconomics: Consumption; Saving; Wealth
  • E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital