Aggregate Data in Economic-Demographic Analysis
This chapter treats issues which arise in the use of aggregate data in economic demography. The discussion focuses on fertility trends and patterns, though the analysis could be applied as well to migration and mortality. The chapter is divided into two sections. In the first section, an attempt is made to summarise current econometric and theoretical thinking on the use of aggregate data to estimate structural demand functions. The principal question addressed is the extent to which structural fertility relationships estimated with aggregate data are an accurate reflection of what is going on at the individual level. An important component of this question is whether or not such aggregate relationships can be used to test the implications of the micro-economic theory of fertility, which yields predictions about the nature of individual-level fertility ‘demand’ functions. The second section considers the estimation of aggregate reduced-form functions. Such functions are required when it is desired to estimate the total effects of variables (such as income) on fertility, rather than the partial effects which are given by structural relationships. Total effects can differ from partial effects when the fertility equation forms part of a general equilibrium system, in which case a change in income (for instance) may induce changes in prices and perhaps other variables which are held constant in structural functions.
KeywordsMigration Covariance Income
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