Estimating Demand Equations

Barten, Anton P.

doi:10.2307/1907487

Cited by 69 publications

(36 citation statements)

References 6 publications

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“…The majority of the currently influential papers have appeared following the adoption of flexible functional forms, which rely heavily on duality theory. The Generalized Leontief (Diewert, 1971), the Translog (Christensen et al, 1975), the Rotterdam (Theil, 1965(Theil, , 1975Barten, 1964Barten, , 1968Barten, , 1977, and the Almost Ideal Demand System or AIDS (Deaton and Muellbauer, 1980a,b) are examples of popular demand models. Their functional forms are locally flexible, in the sense that they do not put a priori restrictions on the possible elasticities at a point.…”

Section: Introductionmentioning

confidence: 99%

Rotterdam model versus almost ideal demand system: will the best specification please stand up?

Barnett

Seck

2008

J of Applied Econometrics

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Among the many demand specifications in the literature, the Rotterdam model and the Almost Ideal Demand System (AIDS) have particularly long histories, have been highly developed, and are often applied in consumer demand systems modeling. Using Monte Carlo techniques, we seek to determine which model performs best in terms of its ability to recover the true elasticities of demand.In applications, the AIDS model has been used in linearized form, where the linearization is accomplished by the choice of a price index to replace the price aggregator function that is within the full nonlinear model. Since the Rotterdam model also is linear in a very similar form, the comparison of the Rotterdam model and the AIDS model has been the subject of much speculation in the literature. We derive the formulas for the AIDS model's elasticities, when the Törnqvist or two modified versions of the Stone price index are used to linearize the model. We not only compare the resulting linearized AIDS model with the Rotterdam model, but also with the full nonlinear AIDS.

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Section: Introductionmentioning

confidence: 99%

Rotterdam model versus almost ideal demand system: will the best specification please stand up?

Barnett

Seck

2008

J of Applied Econometrics

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“…Since these pioneering works, a gradually increasing flow of papers on the PED has appeared in the literature, defining and estimating different consumer demand systems. 1 Even if it is impossible to mention all the contributions to this topic, some of them are particularly worthy of mention (Schultz 1938;Leser 1941;Stone 1954;Theil 1967;Barten 1968;Pollak and Wales 1969;Deaton and Muellbauer 1980;Banks et al 1997;Lewbel and Pendakur 2009). These works generally follow an empirical approach to provide the PED estimates, relegating the economic theory to a normative set of restrictions based on the consumer behaviour axioms (Barten 1964).…”

Section: Doi: 1017221/70/2016-agriceconmentioning

confidence: 99%

Beyond the mean: Estimating consumer demand systems in the tails

Furno¹,

Caracciolo²

2017

AGR ECON-CZECH

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Th e study proposes a novel approach to estimate price demand elasticities at the various levels of expenditures. Th rough the expectile estimator, the demand system can be estimated not only at the mean, as is generally done when implementing the OLS, but also at the lower and higher levels of expenditure. A simple demand system of equations focusing on fi ve basic goods: Food, Recreation, Clothing, Transport, Rent, using the Canadian Family Expenditure Survey data was estimated. Th e comparison of the estimated elasticity of each commodity at the selected expectiles is tested to verify the statistical relevance of any diff erence among the estimates in the tails and those computed at the centre of the conditional distribution. Th e results show with a strong evidence that the elasticity of Food and Recreation grows across the expectiles. Clothing variations are less evident, while the Transport and Rent elasticity is basically constant across the expectiles.

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“…C'est justement le lien très profond entre la théorie économique et l'investigation économétrique qui caractérise les travaux plus récents dans les domaines de l'investissement (Jorgenson 1965, Christensen étal. 1973, de la demande (Barten 1968) et, encore plus récemment des modèles d'équilibre sous rationnement quantitatif (Artus, Laroque et Michel 1984, Sneessens 1983, Lambert 1983. Ce dernier exemple des modèles d'équilibre sous rationnements quantitatifs est un très bel exemple de développement conjoint de la théorie économique (les microfondements de la macro) et des méthodes statistiques appropriées (économétrie du déséquilibre) avec une originalité dans l'utilisation des données puisqu'on y combine les données des comptes nationaux et les données d'enquêtes de conjoncture auprès des entreprises.…”

Section: L'information a Priori En éConométrie* Lise Salvas-bronsard unclassified

L’information a priori en économétrie

Salvas‐Bronsard

1985

L'Actualité économique

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Estimating Demand Equations

Cited by 69 publications

References 6 publications

Rotterdam model versus almost ideal demand system: will the best specification please stand up?

Rotterdam model versus almost ideal demand system: will the best specification please stand up?

Beyond the mean: Estimating consumer demand systems in the tails

L’information a priori en économétrie

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