| Sumario: | In the theoretical literature there are several results available concerning conditions under which market demand is independent of the distribution of personal incomes. A closely related question concerns the conditions under which a representative consumer exists who may have the mean or some other level of income and again, some theoretical results are available. On the other hand the emphasis of much of the empirical literature has been more on providing point estimates of parameters of individual demand functions or Engel curves than on hypothesis testing. Exceptions to this are the work of Doom who used cross section data for two years and a simple model to estimate Engel curves for five commodities taking into account variations in family size. He found that the income distribution did not add at all to the explanation of consumption expenditure achieved by using aggregate income. However of course his result is conditional on his assumptions: that income, family size and consumption expenditures are all distributed independently as lognormal variables, that income distribution effects are independent of price effects and that the Engel curves are loglinear.
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