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An Empirical Comparison of Functional Forms for Engel Relationships

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  • Salathe, Larry

Abstract

The functional form used to represent expenditures or consumption as a function of income and household size (Engel relationship) dramatically affects estimates of elasticities of these variables. This impact also holds true when the elasticities are computed at the mean of the sample used. When per capita expenditures were expressed as a function of per capita income, the double-and semi-log functional forms provided the best statistical fit. When expenditures were expressed as a function of household size and income, the quadratic functional form provided the best statistical fit.

Suggested Citation

  • Salathe, Larry, 1979. "An Empirical Comparison of Functional Forms for Engel Relationships," Journal of Agricultural Economics Research, United States Department of Agriculture, Economic Research Service, vol. 31(2), pages 1-6, April.
    • Handle: RePEc:ags:uersja:148544
    DOI: 10.22004/ag.econ.148544
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    Cited by:

    1. Gineo, Wayne M. & Omamo, Steven Were, 1990. "An Analysis Of Household Expenditures On Nursery Products In The United States," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 22(2), pages 1-10, December.
    2. Shaffer, Creg V., 1992. "Analysis of consumption and expenditure for Lithuanian households: using budget survey data," ISU General Staff Papers 1992010108000018172, Iowa State University, Department of Economics.
    3. Blaylock, James R. & Smallwood, David M., 1986. "U.S. Demand for Food: Household Expenditures, Demographics, and Projections," Technical Bulletins 157011, United States Department of Agriculture, Economic Research Service.

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