Distributional effects in demand analysis: Observations and predictive tests

Most previous empirical demand analyses using time series data have ignored the possible demand effect due to temporal variation in the population’s demographic structure. Following an earlier study by Lippitt, this demand effect is denoted as a distributional effect. This article summarizes results of predictive tests designed to isolate the contribution to predictive accuracy attributable to the distributional effect. Nine expenditure categories are included in the predictive tests. With the exception of two expenditure categories (house operation and house furnishing), the distributional effect was not found to contribute to predictive accuracy. © Taylor & Francis Group, LLC.

Duke Scholars

Author Danny J. Laughhunn Fuqua School of Business