Utility Analysis and the Consumption Function: An Interpretation of Cross-Section Data
The work done in this area during the last few years has taken
two directions.4 One has consisted in extensive correlations of data on aggregate consumption, or saving, with income and a large collection of additional miscellaneous variables. The second direction has been the exploitation of cross-section data. Old material has been reworked and new information collected. The most elaborate of the new studies have been those of the Survey Research Center of the University of Michigan. As in the time series analysis, more and more variables have been included, or are proposed for inclusion, in order to discover stable relations. 6
By now the amount of empirical facts that has been collected is truly impressive; if anything, we seem to be in imminent danger of being smothered under them. What is, however, still conspicuously missing is a general analytical framework which will link together these facts, reconcile the apparent contradictions, and provide a satisfactory bridge between cross-sectional findings and the findings of aggregative time series analysis.