DOCSLIB.ORG

An Approach to Reconciling Competing Ethical Principles in Aggregating Heterogeneous Health Preferences

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
An Approach to Reconciling Competing Ethical Principles in Aggregating Heterogeneous Health Preferences ORIGINAL ARTICLE An Approach to Reconciling Competing Ethical Principles in Aggregating Heterogeneous Health Preferences Barry Dewitt, MSc, Alexander Davis, PhD, Baruch Fischhoff, PhD, Janel Hanmer, MD, PhD Background. Health-related quality of life (HRQL) scores that rely on HRQL scores, such as cost-effectiveness analy- are used extensively to quantify the effectiveness of medical ses. We propose an analytical-deliberative framework for interventions. Societal preference-based HRQL scores aim to choosing one (or a set of) aggregation procedure(s) in a produce societal valuations of health by aggregating valua- socially credible way, which we believe to be analytically tions from individuals in the general population, where sound and empirically tractable, but leave open the institu- each aggregation procedure embodies different ethical prin- tional mechanism needed to implement it. Conclusions. ciples, as explained in social choice theory. Methods. Using Socially acceptable decisions about aggregating heteroge- the Health Utilities Index as an exemplar, we evaluate soci- neous preferences require eliciting stakeholders’ preferences etal preference-based HRQL measures in the social choice among the set of analytically sound procedures, represent- theory framework. Results. We find that current preference ing different ethical principles. We describe a framework for aggregation procedures are typically justified in terms of eliciting such preferences for the creation of HRQL scores, social choice theory. However, by convention, they use only informed by social choice theory and behavioral decision one of many possible aggregation procedures (the mean). research. Key words: health state preferences; health- Central to the choice of aggregation procedure is how to related quality of life; health utility; equity; cost-effectiveness treat preference heterogeneity, which can affect analyses analysis. (Med Decis Making XXXX;XX:xx–xx) eneric health-related quality of life (HRQL) mea- be asked to assess, in numeric terms, the relative Gsures place individuals’ health status on a com- quality of life with blindness and 20/20 vision. mon scale, allowing researchers to compare the effects Although analysts need such aggregation proce- of clinical trials across individuals and summarize dures so that they can incorporate HRQL estimates the results of population health studies.1 Utility-based into their models, aggregating individuals’ estimates measures are a subset of HRQL measures, and attach to societal ones poses a fundamental problem in scores to states of health. These scores can be used for social choice theory.4–8 It has long been known that, outcomes, e.g., quality-adjusted life years, providing under certain general assumptions, there is no unique the estimates needed by regulatory analysts.2,3 solution to this aggregation problem if there is any To produce societal preference-based HRQL heterogeneity in individuals’ preferences. Rather, scores, the common practice is to aggregate the pre- many solutions are possible. Selecting a method to ferences of a sample of individuals designated as collapse a distribution of preferences into a single representing the target population. That might number implies an ethical judgment about what dis- mean eliciting the preferences of patients with a tributional information matters. disease, experts in a disease, or individuals held to Foundational work in utility-based HRQL mea- represent society as a whole. For example, a sample surement9 recognized the preference aggregation of individuals with naturally varying vision might problem. Concurrent research in social choice the- ory revealed the implications of alternative aggrega- tion procedures.10 Here, we integrate the two fields, taking advantage of advancements in both during Ó The Author(s) 2017 the ensuing years. We use the Health Utilities Index Reprints and permission: (HUI) as an exemplar,11–13 examining it in terms of http://www.sagepub.com/journalsPermissions.nav 5,8,10 DOI: 10.1177/0272989X17696999 key concepts in social choice theory, thereby MEDICAL DECISION MAKING/MON–MON XXXX 1 DEWITT AND OTHERS providing a concrete example that could be fol- begins with a set of axioms that a preference aggrega- lowed with other societal preference-based scores. tion procedure must satisfy to be deemed rational. One We use ‘‘HUI’’ to refer to both the HUI Mark 2 and commonly used set has these three axioms: Mark 3 systems. When it is necessary to distinguish 1) Unrestricted Domain: Any set of individual pre- between them, we do so with the acronyms ‘‘HUI:2’’ ferences is allowed. and ‘‘HUI:3.’’ 2) Independence of Irrelevant Alternatives: If two We first identify the conditions under which HUI groups of utility functions agree on a subset of is normatively justified, and then show the range of health states, then the societal preferences of the acceptable aggregation procedures, each of which two groups agree on that same subset. expresses an ethical stance. Finally, we offer an 3) Weak Pareto Criterion: If all individuals prefer approach for choosing among these options. Related health state x to health state y, then the societal concerns can be found in assessments of other forms preference should as well. of analysis.14–17 Our approach is generalizable to any societal preference-based HRQL measurement system. (These axioms are applied only to preference aggregation procedures defining societal prefer- METHODS ences that produce a complete, reflexive, and transi- tive ordering over the state space.) A fundamental Below, we describe relevant results from social result from social choice theory is Arrow’s Impossibil- choice theory, applicable to specifying any socie- ity Theorem,5 which states that the only guaranteed tal preference-based HRQL measurement system. way to aggregate individual preferences that satisfies Additional background material on societal prefer- these axioms is dictatorship: impose the preferences ence-based HRQL scores and the HUI system is of one individual on the entire group. It is called an available in the online Appendix. (Also available at impossibility theorem because ‘‘non-dictatorship’’ is https://osf.io/2xz2a.) an axiom in Arrow’s framework, making it impossible to satisfy the full set of axioms. Social Choice Theory Arrow’s result has been interpreted as precluding any non-dictatorial aggregation procedure from being Social choice theory characterizes preference aggre- normatively justified. However, as Sen8 initially gation procedures that define societal preferences. It showed, and Roberts10 elaborated, Arrow’s theorem is a special case of a more general result about prefer- Received 26 June 2016 from Department of Engineering and Public ence aggregation. Sen and Roberts identified two Policy, Carnegie Mellon University, Pittsburgh, PA, USA (BD, AD); aspects of individuals’ preferences that determine the Department of Engineering and Public Policy and the Institute for Poli- tics and Strategy, Carnegie Mellon University, Pittsburgh, PA, USA type of aggregation that is possible: informational con- (BF); Division of General Internal Medicine, University of Pittsburgh, tent and interpersonal comparability;together,they Pittsburgh, PA, USA (JH). This research was done in the Department constitute the informational basis of the preferences. of Engineering and Public Policy, Carnegie Mellon University, and the The informational content of an individual utility Division of General Internal Medicine, University of Pittsburgh. The function reflects its measurement scale; for example, work was presented at the 2015 North American meeting of the Soci- ordinal or interval. Ordinal preferences provide only ety for Medical Decision Making. Financial support was provided by the Swedish Foundation for the Humanities and the Social Sciences enough information to rank options. For example, (Riksbankens Jubileumsfond) Program on Science and Proven Experi- assigning 15 to option A, 5 to option B, and 0 to option ence. Janel Hanmer was supported by the National Institutes of C means that A is preferred to B, B is preferred to C, Health through Grant Number KL2 TR000 1856, and Barry Dewitt and A is preferred to C, but nothing more. With cardi- received partial support from the Social Sciences and Humanities nal preferences, utility is on an interval scale, so that Research Council of Canada through a doctoral fellowship. The fund- units of utility have consistent meaning across the ing agreements ensured the authors’ independence in designing the study, writing, and publishing the report. Revision accepted for publi- scale. Thus, in the example, A is preferred to B by cation 26 January 2017. twice as much as B is preferred to C, meaning that there is intrapersonal comparability of utility differ- Supplementary material for this article is available on the Medical Deci- ences. Ordinal and cardinal preferences, on ordinal sion Making Web site at http://journals.sagepub.com/home/mdm. and interval scales, respectively, define what can be Address correspondence to Barry Dewitt, MSc, Department of Engi- said about an individual’s preferences but say nothing neering & Public Policy, Carnegie Mellon University, 5000 Forbes Ave, about interpersonal comparisons among individuals’ Pittsburgh, PA 15213, USA; e-mail: [email protected]. preferences. 2 MEDICAL DECISION MAKING/MON–MON XXXX ETHICS, PREFERENCE AGGREGATION, AND HEALTH UTILITY Following Sen and Roberts, we distinguish two elicited on a scale from 0 to 1, where 0 represents
Load more

Recommended publications
  • Aggregation Problem in Demand Analysis, 1930S-1950S
    Aggregation Problem in Demand Analysis, 1930s-1950s Hugo Chu∗ Abstract This article examines the emergence of the representative agent as the outcome of trans- formations that occurred in microeconomics in the 1930s-1950s years, especially in the subfield of demand theory. To tell this story, I begin with a particular historical inter- pretation of this subfield, propounded by Wade Hands and Philip Mirowski in the 1990s, known as the Hotelling-Schultz Impasse. Although this impasse was abandoned by the end of the 1930s, the testing of the Symmetry Restrictions and the validity of the Integra- bility Conditions continued to draw the attention of different research centers. The Cowles Commission, represented by its research director, Tjalling Koopmans, played an impor- tant role during this stage and, more to the point, in the subsequent emergence of the representative agent in microeconomics through their approach to aggregation problem. The significance of Paul Samuelson's introduction of homothetic preferences into General Equilibrium Theory and its connection to Koopmans's writings during the 1950s is also emphasized. Keywords: Representative Agent, Aggregation Problem, Tjalling Koopmans Resumo O presente artigo examina a emerg^enciado agente representativo como resultado da trans- forma¸c~aoque ocorreu na economia nos anos de 1930 a 1950, especialmente no subcampo da teoria da demanda. Para contar essa hist´oria,eu come¸cocom uma interpreta¸c~aohist´orica particular proposta por Wade Hands e Philip Mirowski nos anos de 1990 conhecido como o Impasse de Hotelling-Schultz. Embora esse impasse tenha sido abandonado ao final da d´ecadade 1930, o teste da Restri¸c~aode Simetria e a validade das Condi¸c~oesde Integrabil- idade continuou a chamar aten¸c~aode diferentes centros de pesquisas.
    [Show full text]
  • Empirical Approaches to the Problem of Aggregation Over Individuals
    HD28 .M414 ^3 WORKING PAPER ALFRED P. SLOAN SCHOOL OF MANAGEMENT EMPIRICAL APPROACHES TO THE PROBLEM OF AGGREGATION OVER INDIVIDUALS by Thomas M. Stoker Massachusetts Institute of Technology WP#3549-93-EFA March 1993 MASSACHUSETTS INSTITUTE OF TECHNOLOGY 50 MEMORIAL DRIVE CAMBRIDGE, MASSACHUSETTS 02139 EMPIRICAL APPROACHES TO THE PROBLEM OF AGGREGATION OVER INDIVIDUALS by Thomas M. Stoker Massachusetts Institute of Technology WP#3549-93-EFA March 1993 (I5»r3i35'iS»i** <' EMPIRICAL APPROACHES TO THE PROBLEM OF AGGREGATION OVER INDIVIDUALS By Thomas M. Stoker June 1992, Revised March 1993 Forthcoming in Journal of Economic Literature * Sloan School of Management, Massachusetts Institute of Technology, Cambridge, MA 02139. This work was funded by National Science Foundation Grant SES 9122886. I have received numerous valuable comments from many individuals, comprising a list that is too long to acknowledge here. However, special thanks go to John Heaton and Dale Jorgenson, who provided comments that materially improved this work through each version. I also wanted to acknowledge a fantastic job by John Pencavel and every one of the reviewers , whose comments also materially improved this article. EMPIRICAL APPROACHES TO THE PROBLEM OF AGGREGATION OVER INDIVIDUALS I . Introduction One of the most challenging features of tracking economic activity over time is assessing the impact of the changing composition of the economic players. In the United States, the decline in the typical size of households, the baby boom - baby bust cycles, the changing age structure of the population and the migration of households to southern climates provide examples of such changes. The shift of production from manufacturing and agriculture to service industries, and the continuing infusion of high technology throughout many areas provide examples of how the nature of production has varied.
    [Show full text]
  • Redalyc.Aggregate Production Functions, Neoclassical Growth
    Estudios de Economía Aplicada ISSN: 1133-3197 [email protected] Asociación Internacional de Economía Aplicada España FELIPE, JESUS; FISHER, FRANKLIN M. Aggregate production functions, neoclassical growth models and the aggregation problem Estudios de Economía Aplicada, vol. 24, núm. 1, abril, 2006, pp. 127-163 Asociación Internacional de Economía Aplicada Valladolid, España Available in: http://www.redalyc.org/articulo.oa?id=30113179006 How to cite Complete issue Scientific Information System More information about this article Network of Scientific Journals from Latin America, the Caribbean, Spain and Portugal Journal's homepage in redalyc.org Non-profit academic project, developed under the open access initiative E STUDIOS DE ECONOMÍA APLICADA VOL. 24-1, 2006. P ÁGS. 127-163 Aggregate production functions, neoclassical growth models and the aggregation problem JESUS FELIPE(*) y FRANKLIN M. FISHER(**) (*) Macroeconomics and Finance Research Division. Economics and Research Department. Asian Development Bank. Manila, Philippines; (**) Massachusetts Institute of Technology. Cambridge, MA 02139-4307 E-mails: (*) [email protected] - (**) ffi [email protected] ABSTRACT Lawrence R. Klein pioneered the work on aggregation, in particular in production functions, in the 1940s. He paved the way for researchers to establish the conditions under which a series of micro production functions can be aggregated so as to yield an aggregate production function. This work is fundamental in order to establish the legitimacy of theoretical (neoclassical) growth models and empirical work in this area (e.g., growth accounting exercises, econometric estimation of aggregate production functions). This is because these models depend on the assumption that the technology of an economy can be represented by an aggregate production function, i.e., that the aggregate production function exists.
    [Show full text]
  • An Analytical Construction of Constantinides' Social Utility Function
    AN ANALYTICAL CONSTRUCTION OF CONSTANTINIDES’ SOCIAL UTILITY FUNCTION* Lilia Maliar and Serguei Maliar** WP-AD 2005-25 Corresponding author: L. Maliar. Departamento de Fundamentos del Análisis Económico, Universidad de Alicante, Campus San Vicente del Raspeig, Ap. Correos 99, 03080 Alicante, Spain. E-mail: [email protected]. Editor: Instituto Valenciano de Investigaciones Económicas, S.A. Primera Edición Septiembre 2005 Depósito Legal: V-3792-2005 IVIE working papers offer in advance the results of economic research under way in order to encourage a discussion process before sending them to scientific journals for their final publication. * This paper is a revised version of Chapter 1 of Serguei Maliar's Ph.D. thesis. We are grateful to Peter Hammond, Carmen Herrero, Iñigo Iturbe, Andreu Mas-Colell, Morten Ravn, William Schworm and Antonio Villar for helpful comments. This research was partially supported by the Instituto Valenciano de Investigaciones Económicas, the Ministerio de Educación, Cultura y Deporte, SEJ2004-08011ECON and the Ramón y Cajal program. ** Universidad de Alicante. AN ANALYTICAL CONSTRUCTION OF CONSTANTINIDES’ SOCIAL UTILITY FUNCTION Lilia Maliar and Serguei Maliar ABSTRACT This paper studies the properties of the social utility function defined by the planner's problem of Constantinides (1982). We show one set of restrictions on the optimal planner's policy rule, which is sufficient for constructing the social utility function analytically. For such well-known classes of utility functions as the HARA and the CES, our construction is equivalent to Gorman's (1953) aggregation. However, we can also construct the social utility function analytically in some cases when Gorman's (1953) representative consumer does not exist; in such cases, the social utility function depends on "heterogeneity" parameters.
    [Show full text]
  • Externality Policy Reform: a General-Equilibrium Analysis Sushama Murty and R
    Externality Policy Reform: A General-Equilibrium Analysis Sushama Murty and R. Robert Russell∗ University of California, Riverside August 2002 Abstract Consider a competitive equilibrium in an economy in which an externality (whose market is missing) is the only distortion. The implications of implementing a fea- sible and Pareto-improving policy reform using first-best policy instruments, such as a Pigouvian tax or a direct quantity control of the externality, are well known. The aim of this paper is to study and characterize feasible and Pareto-improving policy reforms in a second-best world with an externality. We consider an exten- sion of the Diamond and Mirrlees (1971) second-best model that incorporates an externality and a direct quantity control on the externality as an additional policy instrument. An apparently counterintuitive finding is that, starting from an initial equilibrium with no direct quantity control on the externality, it might be Pareto improving and equilibrium preserving for the regulator to mandate an increase in the level of a negative externality. In fact, it can be the case that all Pareto- improving and equilibrium-preserving directions of change require an increase in the negative externality. We provide intuition for these results by establishing a nexus between Guesnerie’s [1977, 1995] approach to designing (tax) policy reforms and the standard Kuhn-Tucker technique for identifying the manifold of feasible Pareto-optimal states, given the policy instruments available to the government. JEL classification codes: D5, D62, H23. Key words: Externalities, tax-reform methodology, second-best policies, quantity controls. Acknowledgments:Wehave benefited from valuable comments and critiques of Charles Blackorby, M.
    [Show full text]
  • Improving Aggregation Validity
    IMPROVING AGGREGATION VALIDITY by John E. Lee, Jr.* In recent years, increasing concern has been expressed in the literature of our profession over the problems of aggregation in 1l models of agricultural demand and supply ( 1, 3, 4, 5, 7, 8, 12) • 1 Most frequently the concern has been with the validity of aggregated supply estimates when micro supply situations are simulated in linear programming models • The aggregation problem stems from the fact that while most economic activity originates with individual firms and households, economists, with increasing frequency, want to say something about the behavior, in the aggregate, of all or a group of such units. One obvious approach is to build up to the aggregate, firm by firm. This is not feasible in an atomistic economy such as agriculture. A second approach is to ignore the individual units by working with observed or postulated relationships among economic aggregates. A third alternative, especially for an atomistic or purely competitive economy, is to approach the aggregate through "representative" units or through the analysis of subaggregates. The latter approach has been particularly popular in agricultural supply research. The so-called Regional Adjustment Studies (NC-54, S-42, etc.) have used linear programming models of representative farms to derive regional estimates of supply schedules for the major commodities. The basic units of analysis for a model of national agricultural production developed by the Economic Research Service are representative resource situation subaggregates. Linear programming models of these units are used to estimate aggregate supply response to economic stimuli. These are but two examples of the micro-oriented approach to estimation of aggregate behavior--an approach that has almost become conventional in farm management and production economics research.
    [Show full text]
  • The Piglog Model
    The Piglog Model The cost function underlying both the Engel curves and the Tornqvist type of indexes we construct- ed are based on the piglog functional form (Deaton and Muellbauer, 1980). The piglog model was developed to treat aggregate consumer behavior as if it were the outcome of a single maximizing consumer. This problem of how to treat aggregate consumer behavior as if it were the outcome of a single maximizing consumer exists because it is neither necessary nor desirable for a macroeconom- ic relationship to perfectly mimic its microeconomic foundation. Hence, in demand analysis, theory deals with behavior at the individual level and the laws of demand apply to individuals. At the micro level, conditions like symmetry and separability may hold, while at the macro level they may not. Therefore, the market demand functions that we estimate may not have the desirable properties of micro demand functions. This problem is known in economics as the aggregation problem. We assume that each households expenditure (xh) is exogenous and that it varies from household to household. The prices of different goods are assumed to be the same for all consumers, and this assumption is crucial to the analysis. Its effect is to ensure that all consumers face the same prices so that only differences in expenditure levels need to be considered. Consequently, the conditions that must exist for aggregation can be determined by establishing what restrictions have to be placed on the Engel curve. First, consider the individual demand for the ith good in the hth household, and write the demand function as: qih = gih (xh, p).
    [Show full text]
  • John S.L. Mccombie University of Cambridge & Marta R.M. Spreafico
    THE SHARE OF THE TOP ONE PERCENT : IS IT DUE TO THE MARGINAL PRODUCT OF LABOUR OR FINANCIALISATION ?* John S.L. McCombie University of Cambridge & Marta R.M. Spreafico Catholic University of Milan Abstract The last thirty years or so have seen the rapid increase in the share of income of the top one percent, especially in the United States. This has led to increasing concern about the consequences of the degree of income and wealth inequality and whether or not policies should be introduced further to reduce it. However, for a long time neoclassical economics has ignored the problem, generally because of its uncritical acceptance that individuals are paid their marginal products in largely competitive markets. It is a short step from this to John Bates Clark’s normative argument that this is what they should receive, a view espoused recently by Mankiw (2013) together with the ‘just deserts’ ethical argument. Nevertheless, it is shown that the marginal productivity theory is deeply flawed empirically and cannot, as a matter of logic, be substantiated theoretically. The rise in the share of the top one percent is largely due to the increase in chief executive officers’ salaries which was due to institutional factors, notably the role of remuneration committees and the widespread adoption of stock options in the 1990s. These were introduced in a mistaken belief that they would overcome the principal-agent problem. There was also a rapid change in the economic mileux with the rise of financialisation, defined broadly to include the increasing role of financial markets. The neoclassical approach is of limited use in explaining these phenomena.
    [Show full text]
  • The Preference Aggregation Problem
    The preference aggregation problem Antonio Quesada † Departament d’Economia, Universitat Rovira i Virgili, Avinguda de la Universitat 1, 43204 Reus, Spain 26th October 2008 Abstract This paper presents the basic preference aggregation model and proves two of the most significant results in the theory of preference aggregation: Arrow’s theorem and Sen’s theorem. Keywords : Social welfare function, preference aggregation, Pareto efficiency, independence of irrelevant alternatives, decisiveness, dictatorship. JEL Classification : D71 † E-mail address: [email protected]. Financial support from the Spanish Ministerio de Educación y Ciencia under research project SEJ2007-67580-C02-01 and from the Departament d’Universitats, Recerca i Societat de la Informació ( Generalitat de Catalunya ) under research project 2005SGR-00949 is gratefully acknowledged. −1− 1. Introduction The distinctive feature of a microeconomic model consists of taking decisions made by individuals as the basic element of the model: in a microeconomic model, individuals and the way they make decisions are the building blocks of the model. Individuals in a microeconomic model are typically assumed to make decisions on the basis of their preferences over the results that those decisions generate. Specifically, individuals are supposed to make decisions that lead to some of their most preferred results. So in game theory, the individuals (players) choose strategies in order to obtain the maximum payoff; in consumer theory, the individuals (consumers) choose bundles to maximize their utility functions; and in the theory of industrial organization, the individuals (firms) choose the amount of production to maximize their profit functions. The view that every economic phenomenon involves individuals making some decision implies that all economic models are, in the last instance, microeconomic models.
    [Show full text]
  • The Aggregation Problem: Implications for Ecological Economics
    A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Fix, Blair Working Paper The aggregation problem: Implications for ecological economics Working Papers on Capital as Power, No. 2018/03 Provided in Cooperation with: The Bichler & Nitzan Archives Suggested Citation: Fix, Blair (2018) : The aggregation problem: Implications for ecological economics, Working Papers on Capital as Power, No. 2018/03, Forum on Capital As Power - Toward a New Cosmology of Capitalism, s.l., http://bnarchives.yorku.ca/543/ This Version is available at: http://hdl.handle.net/10419/179420 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by-nc-nd/4.0/ www.econstor.eu WORKING PAPERS ON CAPITAL AS POWER No.
    [Show full text]
  • Isolation and Aggregation in Economics
    Ekkehart Schlicht Isolation and Aggregation in Economics Springer-Verlag Berlin Heidelberg NewYork Tokyo Prof. Dr. Ekkehart Schlicht Institut flir Volkswirtschaftslehre, Technische Hochschule Darmstadt, SchloD D-6100 Darmstadt (c) Ekkehart Schlicht. All rights reserved. This work may be freely distributed for non-commercial use. The original hard cover copy is available for €/$ 50.- here, ISBN 3-540- 15254-7 Springer-Verlag Berlin Heidelberg New York Tokyo ISBN 0-387- 15254-7 Springer-Verhg New York Heidelberg Berlin Tokyo LI- of Cwgress Catnloging-in-Pubkation DPta Schlicht, Ekkehart, Isolation and aggregation in economics. Bibliography: p. Includes indexes. I. Macroeconomics. I. litle. HB172.5.S35 1985 339 85-12638 ISBN 0-387-15254-7 (US.) 'This work is subject to copyright. All rights are reserved, whether the whole or part of the material is concerned, specifically those of translation, reprinting, re-use of illustrations, broad- casting, reproduction by photocopying machine or similar means, and storage in data banks. Under 5 54 of the German Copyright Law where copies are made for other than private use a fee is payable to "VerwertungsgeseUschatl Wort", Munich. 0 Springer-Verlag Berlin Heidelberg 1985 Printed in Germany The use of general descriptive names, trade marks, etc. in this publication, even if the former are not especially identified, is not to be taken as a sign that such names, as understood by the Trade Marks and Merchandise Marks Act. may accordingly by used hdyby anyone. Typesetting, Printing and Bookbinding: Konrad Triltrch, Graphischer Betrieb, Wonburg 2142/3140-543210 For my family Preface In order to solve a given problem, economic analysis is com- pelled to concentrate on the interaction of selected factors while disregarding a multitude of other influences.
    [Show full text]
  • 46 Approaches to the Aggregation Problem.Pdf
    APPROACHES TO THE AGGREGATION PROBLEM by Michael T. Hannan Stanford University Technical Report No. 46 1972 ABSTRACT This paper attempts to further development of a general "theory of aggregation" which will integrate the results developed for specialized social science research applications. We first formulate a general model within which aggregation bias is defined. Given this formulation three well developed perspectives on the methodological problems of aggregation are compared -- a "classical" grouping approach, a causal models approach and a specification error approach. All three perspec­ tives are reasonably useful for the simplest cases. However, the causal models and specification error approaches are preferable as general formulations since they deal more Adequately with realistic complications. No existing approach handles aggregation in multivariate models in a completely satisfactory manner. A number of suggestions are made for extending existing formulations to remedy this situation. APPROACHES TO THE AGGREGATION PROBLEM* The term aggregation is used loosely In the social sciences to refer to a broad class of rather diverse issues. It refers to conceptual and theoreti­ cal issues involved in attempts at composition or shifts in levels of analy­ sis. It Is likewise used to refer to attempts at index construction or data reduction «here sets of Indicators or variables are combined. Finally, the term is used to refer to analysis issues involving shifts in levels of data aggregation. While the theoretical and methodological issues have implications for each other» it is unlikely that we can develop a single abstract calculus for analysing both types of issues.^ There do exist, however, abstract formu­ lations which develop of the partial similarity of the aggregation of variables and the aggregation of observations.
    [Show full text]