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When Is Expenditure "Exogenous" In Separable Demand Models?

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Author Info
Lafrance, Jeffrey T.

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Abstract

The separability hypothesis and expenditure as an exogenous variable in a system of conditional demands are analyzed. Expenditure cannot be weakly exogenous in a system of conditional demands specified as functions of the prices of the separable goods and total expenditure on those goods. Furthermore, expenditure is uncorrelated with the residuals of the conditional demand equations only when severe restrictions are satisfied. Therefore, expenditure will seldom be strictly exogenous. Econometric methods are presented for the consistent and efficient estimation of the unknown parameters when expenditures is correlated with the residuals and when it is not.

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Article provided by Western Agricultural Economics Association in its journal Western Journal of Agricultural Economics.

Volume (Year): 16 (1991)
Issue (Month): 01 (July)
Pages:
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Handle: RePEc:ags:wjagec:32621

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Keywords: Demand and Price Analysis;

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References listed on IDEAS
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  1. Robert Summers, 1957. "A Note on Least Squares Bias in Household Expenditure Analysis," Cowles Foundation Discussion Papers 29, Cowles Foundation, Yale University. [Downloadable!]
  2. Deaton, Angus, 1986. "Demand analysis," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 3, chapter 30, pages 1767-1839 Elsevier. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Moschini, GianCarlo, 2001. "Flexible Multistage Demand System Based on Indirect Separability, A," Staff General Research Papers 1921, Iowa State University, Department of Economics. [Downloadable!]
    Other versions:
  2. Thompson, Gary D., 2003. "Retail Demand For Greenhouse Tomatoes: Differentiated Fresh Produce," 2003 Annual meeting, July 27-30, Montreal, Canada 21946, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  3. Bopape, Lesiba, 2006. "Heterogeneity of Household Food Expenditure Patterns in South Africa," 2006 Annual meeting, July 23-26, Long Beach, CA 21300, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  4. Chouinard, Hayley H. & Davis, David E. & Lafrance, Jeffrey T. & Perloff, Jeffrey M., 2006. "Milk Marketing Order Winners and Losers," 2006 Annual meeting, July 23-26, Long Beach, CA 21238, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
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  5. Peterson, Everett B. & Cotterill, Ronald W., 1998. "Incorporating Flexible Demand Systems in Empirical Models of Market Power," Research Reports 25159, University of Connecticut, Food Marketing Policy Center. [Downloadable!]
  6. Buccola, Steven & Zanden, Loren Vander, 1997. "The Demand for Wines: Variety and Region Effects," 1997 Annual Meeting, July 13-16, 1997, Reno\Sparks, Nevada 35765, Western Agricultural Economics Association. [Downloadable!]
  7. Cashin, Paul, 1991. "A Model Of The Disaggregated Demand For Meat In Australia," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 35(03), December. [Downloadable!]
  8. Taljaard, P.R. & Alemu, Z.G. & van Schalkwyk, H.D., 2004. "The demand for meat in South Africa: An almost ideal estimation," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 43(4), December. [Downloadable!]
  9. Susanto, Dwi & Rosson, C. Parr & Henneberry, Shida, 2008. "The Structure of U.S. Red Meat and Livestock Imports," 2008 Annual Meeting, February 2-6, 2008, Dallas, Texas 6824, Southern Agricultural Economics Association. [Downloadable!]
  10. Rosario Crino, 2006. "Are U.S. White-Collar Really at Risk of Service Offshoring?," CESPRI Working Papers 183, CESPRI, Centre for Research on Innovation and Internationalisation, Universita' Bocconi, Milano, Italy, revised Oct 2006. [Downloadable!]
  11. Satyanarayana, Vidyashankara & Wilson, William W. & Johnson, D. Demcey, 1997. "Import Demand For Malt: A Times Series And Econometric Analysis," Agricultural Economics Reports 23343, North Dakota State University, Department of Agribusiness and Applied Economics. [Downloadable!]
  12. Lee, Youngjae & Kennedy, P. Lynn & Hilbun, Brian, 2008. "Import Demand System Analysis Of The South Korean Wine Market With The Source Differentated Aids Model," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6345, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  13. Boonsaeng, Tullaya & Wohlgenant, Michael, 2006. "Testing Separability between Import and Domestic Commodities: Application to U.S. Meat Demand in a Dynamic Model," 2006 Annual Meeting, February 5-8, 2006, Orlando, Florida 35267, Southern Agricultural Economics Association. [Downloadable!]
  14. Yang, Seung-Ryong & Koo, Won W., 1994. "Japanese Import Demands for Meat," Agricultural Economics Reports 23226, North Dakota State University, Department of Agribusiness and Applied Economics. [Downloadable!]
  15. Jung, Jione & Koo, Won W., 2002. "Demand For Meat And Fish Products In Korea," 2002 Annual meeting, July 28-31, Long Beach, CA 19895, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  16. Xiao, Hui & Kinnucan, Henry W. & Kaiser, Harry M., 1998. "Advertising, Structural Change, And U.S. Non-Alcoholic Beverage Demand," 1998 Annual meeting, August 2-5, Salt Lake City, UT 20885, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
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