Macro Models Based on Aggregation of Micro Behavior Using   Models of Changes in the Distribution of Individuals
{'Code': '04050100', 'Directorate': {'Abbreviation': 'SBE', 'LongName': 'Direct For Social, Behav & Economic Scie'}, 'Division': {'Abbreviation': 'SES', 'LongName': 'Divn Of Social and Economic Sciences'}}
{'SignBlockName': 'Daniel H. Newlon', 'PO_EMAI': None, 'PO_PHON': None}
A great deal of applied econometric analysis uses aggregated data               (from Census, the Bureau of Labor Statistics and so on) to test and             apply theories about the behavior of individuals in the economy.  For           instance, studies estimating systems of demand equations for many               types of consumer goods are based on the microeconomic theory                   describing individual optimizing behavior, but use consumer                     expenditure data of the entire country, thereby implicitly treating             the aggregated data as if they were generated by a single person.  In           a similar circumstance the output of a firm is theoretically derived            based on the principle of profit maximization.  Estimation of                   production functions of firms, however, is often done using data based          on an entire industry or country.                                                                                                                               The assumption of a single consumer or firm being a representative of           the entire economy is a convenient one, in that it allows application           and testing of microeconomic theories with available aggregate data,            and it avoids intractable problems of aggregation and collective                choice.  Unfortunately, there is no reason deriving from economic               theory to assume that national aggregate data, which is the result of           adding the economic activities of millions of diverse individuals,              will resemble the economic activity of a single firm or consumer.  The          researcher must thus assume some general parameters for the aggregated          data in order to uncover the underlying optimizing behavior.  Past              theoretical work has shown that very little structure need be assumed           on the aggregated data to infer the existence of aggregate demand or            supply functions, and that those restrictions need be placed only on            the statistical distribution of the aggregate data.  Thus one can               validly restrict the distribution of consumer expenditures to remain            unchanged through time or to change in general specified ways.  Such            distributional assumptions can also be applied to production.                                                                                                   Professor Lewbel derives aggregate demand equations for the economy by          considering the restrictions on the changes over time in the                    distribution of total expenditures in the population, and combining             them with specific individual demand behavior.  These aggregate demand          equations satisfy all the conditions of utility maximization on which           individual demand equations are based.  Technically, he constructs              nonlinear models of macroeconomic data based on explicit models of              both heterogeneous microeconomic behavior and of the evolution over             time of the distribution of individual agents in the economy.  This             allows for the construction of models of shifts in the distributions            through time that are compatible with aggregation theory.                                                                                                       Professor Lewbel tests the theoretical validity of aggregate models by          estimation using cross sectional or panel data, and by studying the             distribution data in several time periods.  These methods are applied           to various national data sets like the National Income and Product              Accounts, the Consumer Expenditure Survey, and the U. S. Current                Population Reports.
{'FirstName': 'Arthur', 'LastName': 'Lewbel', 'PI_MID_INIT': None, 'PI_SUFX_NAME': None, 'PI_FULL_NAME': 'Arthur Lewbel', 'EmailAddress': 'lewbel@bc.edu', 'NSF_ID': '000166227', 'StartDate': '07/15/1987', 'EndDate': None, 'RoleCode': 'Principal Investigator'}
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{'Code': '1320', 'Text': 'Economics'}
{'url': 'https://www.nsf.gov/awardsearch/download?DownloadFileName=1987&All=true', 'xml': '8712787.xml'}