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A TEST OF CONSUMER DEMAND THEORY USING OBSERVATIONS OF INDIVIDUAL CONSUMER PURCHASES *
Author(s) -
BATTALIO RAYMOND C.,
KAGEL JOHN H.,
WINKLER ROBIN C.,
FISHER EDWIN B.,
BASMANN ROBERT L.,
KRASNER LEONARD
Publication year - 1973
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.1973.tb00972.x
Subject(s) - economics , consumer demand , test (biology) , microeconomics , econometrics , paleontology , biology
In this paper we report a test of consumer demand theory using price, quantity and expenditure data for individual consumer's entire expenditures in an ongoing economic system. In conducting the test major emphasis has been placed on controlling and calculating errors of observation in the data collected and explicitly incorporating the measures of errors of observation into the evaluation of the test results.) The analysis presented below demonstrates that efforts directed along these lines are essential to (I) obtain observations of sufficient accuracy to contradict the theory of consumer demand and (2) distinguish between actual contradictions between propositions of the theory and propositions describing observations, on the one hand, and the effects of measurement error, on the other. 0