Demographics and demand: Evaluation of alternative functional forms
AbstractWe evaluate the role of functional form of demographics in demand analysis by proposing the GQL ‘unstructured’ demographically transformed model which nests the Barten–Gorman demographically modified model and popular rank-3 and rank-2 demand systems. We use UK individual data and find that the equivalence of the ‘unstructured’ and Barten–Gorman forms and identification of meaningful equivalence scales depend on the degree of flexibility of the demand system in demographic, price and income effects.
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Bibliographic InfoArticle provided by Elsevier in its journal Economics Letters.
Volume (Year): 117 (2012)
Issue (Month): 3 ()
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Web page: http://www.elsevier.com/locate/ecolet
Demographics; Equivalence scales; Consumption economies of scale; Barten–Gorman model; GQL model; Preference heterogeneity;
Find related papers by JEL classification:
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
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