The Law of Consumer Demand in Japan: A Macroscopic Microeconomic View
In economics, there have been found few fundamental theories as complying with statistical laws, really examined by observation. Econometrics still clings to a very special structure, patronized with favoritism by a traditional economic theory. In 1990’s, Hidenbrand, Grandmont, Grodal and others have tried to formulate consumer demand by a procedure definitely different from the traditional way of using an individualistic utility function. An alternative approach is to make assumptions on the population of the households as a whole textitthe macroscopic microeconomic approach. If the households’ demand functions are not identical then one needs a certain form of heterogeneity of the population of households. This approach really also requires empirical tests. The method of nonparametric test on income distribution to estimate covariances on households spending may be applied. In this article, Japanese Family Expenditure Data is used for estimation. The law of consumer demand is one of the most important topics since a birth of economics. Our statistical economics should, first of all, demand innovation in this area.
KeywordsCovariance Matrix Income Distribution Average Income Consumer Demand Positive Semidefinite
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