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The authors model (myopic) habit formation, interdependence of preferences among consumers, and demographic effects as taste shifters in a micro consumer demand model of the almost ideal demand variety. The model is estimated for Dutch micro data. The authors investigate the dynamic properties of the model and find that it behaves very differently from models without interdependence of preferences. The implications for micro-macro modeling are discussed. Copyright 1991 by Royal Economic Society.

Habit Formation, Interdependent Preferences and Demographic Effects in the Almost Ideal Demand System