Econometrica: Jul 1977, Volume 45, Issue 5

Revealed Preference and Aggregation

https://doi.org/0012-9682(197707)45:5<1173:RPAA>2.0.CO;2-Q
p. 1173-1182

Wayne J. Shafer

This paper studies conditions under which aggregate demand behavior will satisfy the usual revealed preference axioms. Assuming a fixed distribution of income and the hypothesis that individual demand is homogeneous in income, it is shown that the weak axiom of revealed preference or the congruence axiom will hold in the aggregate if each individual demand satisfies the corresponding axiom. it is also shown that the hypothesis of homogeneity in income is not necessary for the weak axiom to hold in the aggregate.

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