SFB 303 Discussion Paper No. A - 496
Author: Evstigneev, Igor V., Werner Hildenbrand, and Michael Jerison
Title: Metonymy and Cross Section Demand
Abstract: Cross section consumer expenditure data are frequently used to make
conclusions about consumer demand behavior. Such conclusions, however, can
only be justified under certain assumptions, which are often left unstated
in the empirical demand literature. An assumption of this type, the metonymy
hypothesis, was stated rigorously and then exploited by Härdle, Hildenbrand
and Jerison when analyzing the monotonicity property of aggregate demand
functions. The purpose of the present paper is to examine the metonymy
hypothesis in more detail. We prove that the distribution of demand vectors
derived from a not necessarily metonymic population is identical to the
distribution derived from some metonymic one. This implies, in particular,
that the metonymy hypothesis cannot be rejected or confirmed on the basis of
data from a single cross section.
Keywords: Cross section demand; Consumer expenditure data, Metonymy hypothesis,
Law of Demand
JEL-Classification-Number:
Creation-Date: November 1995
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