Economic Modelling 21 (2004) 361–385 0264-9993/04/$ - see front matter  2003 Elsevier B.V. All rights reserved. PII: S0264-9993 Ž 03 . 00037-3 Simultaneous estimation of an implicit directly additive demand system and the distribution of expenditure—an application of maximum entropy J.A.L. Cranfield *, Paul V. Preckel , James S. Eales , a, b b Thomas W. Hertel b Department of Agricultural Economics and Business, University of Guelph, Guelph, a ON Canada N1G 2W1 Department of Agricultural Economics, Purdue University, West Lafayette, Indiana 47907-1145, USA b Accepted 16 June 2003 Abstract This study presents a numerical scheme for dealing with the aggregation of consumer demands. Rather than directly estimating an aggregate demand model whose form and restrictions are inherited from the form and restrictions of individual demands, unobservable disaggregate demands and expenditure distributions are recovered in a manner consistent with observable information. Key to the recovery process are conditions ensuring the recovered distributions reflect known information regarding the actual distribution, and that recovered disaggregate demands add up to the known level of aggregate demand. This scheme is used to model international consumption patterns with an implicit, directly additive demand system.  2003 Elsevier B.V. All rights reserved. JEL classifications: D1; C4 Keywords: Aggregation; Consumer demands; Expenditure distribution 1. Introduction The role of economic growth in shaping the pattern of consumer demand for goods and services at different points in the development spectrum cannot be *Corresponding author. Tel.: q1-519-824-4120; fax: q1-519-767-1510. E-mail address: jcranfie@uoguelph.ca (J.A.L. Cranfield).