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Estimation of Engel Curves from Survey Data with Zero Expenditures

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  • Hikaru Hasegawa
  • Kazuhiro Ueda
  • Kunie Mori

Abstract

The objective of this article is to propose a Bayesian method for estimating a system of Engel functions using survey data that include zero expenditures. We deal explicitly with the problem of zero expenditures in the model and estimate a system of Engel functions that satisfy the adding‐up condition. Furthermore, using Markov chain Monte Carlo method, we estimate unobservable parameters, including consumption of commodities, total consumption and equivalence scale, and use their posterior distributions to calculate inequality measures and total consumption elasticities.

Suggested Citation

  • Hikaru Hasegawa & Kazuhiro Ueda & Kunie Mori, 2008. "Estimation of Engel Curves from Survey Data with Zero Expenditures," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 70(4), pages 535-558, August.
    • Handle: RePEc:bla:obuest:v:70:y:2008:i:4:p:535-558
    DOI: 10.1111/j.1468-0084.2008.00507.x
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    References listed on IDEAS

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