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Imposing Local Curvature Conditions in Flexible Demand Systems

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Author Info
Moschini, Giancarlo

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Abstract

By reparameterizing the basic translog and the log translog demand systems and exploiting the fact that the Slutsky matrix must be negative semidefinite but cannot he negative definite, it is shown that a recently proposed simple procedure to maintain locally the curvature property of consumer theory can be applied to these popular translog models as well. The proposed procedure can also be applied to other demand-system specifications such as, for example, the nonseparable generalized linear expenditure system.

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Publisher Info
Article provided by American Statistical Association in its journal Journal of Business and Economic Statistics.

Volume (Year): 17 (1999)
Issue (Month): 4 (October)
Pages: 487-90
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Handle: RePEc:bes:jnlbes:v:17:y:1999:i:4:p:487-90

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  1. GianCarlo Moschini, 2000. "Flexible Multistage Demand System Based on Indirect Separability, A," Center for Agricultural and Rural Development (CARD) Publications 00-wp265, Center for Agricultural and Rural Development (CARD) at Iowa State University. [Downloadable!]
    Other versions:
  2. Fabienne Féménia & Alexandre Gohin, 2009. "Estimating censored and non homothetic demand systems: the generalized maximum entropy approach," Working Papers SMART - LERECO 200912, INRA UMR SMART. [Downloadable!]
  3. Koebel, Bertrand M. & Falk, Martin & Laisney, Francois, 2000. "Imposing and testing curvature conditions on a Box-Cox function," ZEW Discussion Papers 00-70, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  4. Chua, C.L. & Griffiths, W.E. & O'Donnell, C.J., 2001. "Bayesian Model Averaging in Consumer Demand Systems with Inequality Constraints," Department of Economics - Working Papers Series 806, The University of Melbourne. [Downloadable!]
  5. Femenia, Fabienne & Gohin, Alexandre, 2007. "Estimating price elasticities of food trade functions: How relevant is the gravity approach?," Working Papers 7211, TRADEAG - Agricultural Trade Agreements. [Downloadable!]
  6. Arthur Lewbel & Serena Ng, 2000. "Demand Systems With Nonstationary Prices," Boston College Working Papers in Economics 441, Boston College Department of Economics, revised 07 Jun 2002. [Downloadable!]
    Other versions:
  7. Ball, V. Eldon & Moss, Charles B. & Erickson, Kenneth W. & Nehring, Richard, 2003. "Modeling Supply Response In A Multiproduct Framework Revisited: The Nexus Of Empirics And Economics," 2003 Annual meeting, July 27-30, Montreal, Canada 21981, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  8. Holt, Matthew T. & Goodwin, Barry K., 2009. "The Almost Ideal and Translog Demand Systems," MPRA Paper 15092, University Library of Munich, Germany. [Downloadable!]
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