John M Heineke

A Comment on Uncertainty and Household Decisions

In this short paper we reformulate and extend Sandmo’s (3) well known analysis of “capital risk” to include the effects of savings uncertainty on both the savings decision and the labor-leisure decision.

Exact Aggregation and the Finite Basis Property

The authors address the following two fundamental questions in the theory of exact aggregation: (1) What restrictions, if any, need to be imposed on the vector of aggregates in order that the aggregate demand functional representation be nontrivial and economically interesting? (2) What economic restrictions, if any, does exact aggregation impose on demand functions, both at the ind ividual and aggregate levels? The answer to the first question involv es the information censored or masked by the aggregates. The answer t o the second question involves a condition known as the finite basis property, and its implications for Engel curve similarity across pric es, commodities, and consumers. Copyright 1988 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

A note on modeling the criminal choice problem

In this paper we show that neither Becker nor Brown and Reynolds provide a proper description of the failure state in the criminal choice problem. A more satisfactory specification is provided which yields the Becker and Brown and Reynolds formulations as special cases.

Aggregation and identification in consumer demand systems

In this paper we explore the following fundamental question: Are there reasonable conditions under which the parameters of estimated aggregate demand systems will uniquely identify underlying individual demand systems? In the process of examining this question we show that the conditions which have been reported in the literature are incomplete. The exercise is carried out in the framework of individual demand systems which are integrable and exactly aggregable.

Factor Allocations Under Uncertainty: An Extension

In this paper the factor supply results of Leland. Sandmo and Block and Heineke are generalized to include the case of a household making a joint savings-labor supply decision when the returns to each factor are uncertain.

An Analysis of Wildfire Prevention

A model of the production of wildfire ignitions and damages is developed and used to determine wildland activity-regulation decisions, which minimize total expected cost-plus-loss due to wildfires. In this context, the implications of various policy decisions are considered. The resulting decision rules take a form that makes it possible for existing wildfire management agencies to readily adopt them upon collection of the required data.

On Some Global Properties of Gorman Class Demand Systems

This letter explores some global properties of the Gorman class of demand functions. We find that generalizing the homothetic preferences case to non-homotheticity gives rise to an unexpected global problem. In particular, interaction of the bounded budget share condition with either Slutsky symmetry or with homogeneity reduces the set of admissible Gorman class demand functions to but one - the polar form.

On an implication of a theorem due to Gorman

This letter explores the robustness (in an approximating sense) of a class of demand systems which have been discussed by Gorman. This class is of fundamental interest because it is known to be the only class of demand systems which permits exact aggregation. We discuss the reasons which underlie the fact that one can not guarantee that an integrable member of the Gorman class can be found which will be as close as one desires to an arbitrary, integrable demand system.

The Finite Basis Property and Exact Aggregation

An individual demand function is said to satisfy the finite basis property when its set of Engel curves has a finite spanning subset. In the present letter we discuss why this property underlies the theory of exact aggregation.

Exact Aggregation and Estimation

In this paper we provide suffic ient condi tions, which, when combined with recent developments in the theory of exact aggregation, permit estimation of group specific demand systems when micro-level information is unavailable. We illustrate the approach by estimating group specific cost of living indices using only readily available census information and aggregate expenditure data.