Excerpt from Statistical Aggregation Analysis, Characterizing Macro Functions: With Cross Section Data Although econometricians have been estimating time series macro functions over average data for decades, it is rare to find studies which take into account the "averaged" character of the data. Even in the simplest consumption function regression of average consumption on average income, one is only capturing the statistical relation between two summary statistics of the underlying consumption income distribution. Unless saving behavior is virtually identical across individuals or the structure of the income distribution is extremely limited, an average consumption-average income regression will not completely describe the true economic structure relating average consumption to the income distribution. In the same sense, any macro function relating average data is likely to ignore many important distributional influences. To completely characterize the true population...