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The testing and estimation of complete demand systems on household budget surveys

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  • Ray, Ranjan

Abstract

A recent demand system (AIDS) is extended to include family size explicitly and, then, estimated on Indian budget data. The estimation, using non-linear FIML, is performed, first, on pure time series and, then, on pooled cross section data. Within and across equation restrictions are imposed and tested. The principal results include:u(a)significant price and family size effects on the budget share of an item,(b)sensitivity of test results on homogeneity and symmetry to (i) rural/urban data, (ii) time series/cross section and (iii) inclusion/omission of family size,(c)considerable difference between pure time series and pooled cross section estimates, and(d)difference between the expenditure responses of the rural and urban consumer.

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Bibliographic Info

Article provided by Elsevier in its journal European Economic Review.

Volume (Year): 17 (1982)
Issue (Month): 3 ()
Pages: 349-369

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Handle: RePEc:eee:eecrev:v:17:y:1982:i:3:p:349-369

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  1. Christensen, Laurits R. & Manser, Marilyn E., 1977. "Estimating U.S. consumer preferences for meat with a flexible utility function," Journal of Econometrics, Elsevier, vol. 5(1), pages 37-53, January.
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  3. Basmann, R L & Battalio, Raymond C & Kagel, John H, 1973. "Comment on R. P. Byron's "The Restricted Aitken Estimation of Sets of Demand Relations"," Econometrica, Econometric Society, vol. 41(2), pages 365-70, March.
  4. Deaton, Angus S, 1978. "Specification and Testing in Applied Demand Analysis," Economic Journal, Royal Economic Society, vol. 88(351), pages 524-36, September.
  5. Muellbauer, John, 1977. "Testing the Barten Model of Household Composition Effects and the Cost of Children," Economic Journal, Royal Economic Society, vol. 87(347), pages 460-87, September.
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  7. Pollak, Robert A & Wales, Terence J, 1980. "Comparison of the Quadratic Expenditure System and Translog Demand Systems with Alternative Specifications of Demographic Effects," Econometrica, Econometric Society, vol. 48(3), pages 595-612, April.
  8. Laitinen, Kenneth, 1978. "Why is demand homogeneity so often rejected?," Economics Letters, Elsevier, vol. 1(3), pages 187-191.
  9. Pollak, Robert A & Wales, Terence J, 1978. "Estimation of Complete Demand Systems from Household Budget Data: The Linear and Quadratic Expenditure Systems," American Economic Review, American Economic Association, vol. 68(3), pages 348-59, June.
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  12. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-26, June.
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  14. McElroy, Marjorie B, 1975. "A Spliced CES Expenditure System," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 16(3), pages 765-80, October.
  15. Brown, Alan & Deaton, Angus S, 1972. "Surveys in Applied Economics: Models of Consumer Behaviour," Economic Journal, Royal Economic Society, vol. 82(328), pages 1145-1236, December.
  16. Goldberger, Arthur S, 1972. "Structural Equation Methods in the Social Sciences," Econometrica, Econometric Society, vol. 40(6), pages 979-1001, November.
  17. Deaton, Angus, 1974. "A Reconsideration of the Empirical Implications of Additive Preferences," Economic Journal, Royal Economic Society, vol. 84(334), pages 338-48, June.
  18. Barten, A. P., 1969. "Maximum likelihood estimation of a complete system of demand equations," European Economic Review, Elsevier, vol. 1(1), pages 7-73.
  19. Barten, Anton P, 1977. "The Systems of Consumer Demand Functions Approach: A Review," Econometrica, Econometric Society, vol. 45(1), pages 23-51, January.
  20. Lau, Lawrence J & Lin, Wuu-Long & Yotopoulos, Pan A, 1978. "The Linear Logarithmic Expenditure System: An Application to Consumption-Leisure Choice," Econometrica, Econometric Society, vol. 46(4), pages 843-68, July.
  21. Ray, Ranjan, 1980. "Analysis of a Time Series of Household Expenditure Surveys for India," The Review of Economics and Statistics, MIT Press, vol. 62(4), pages 595-602, November.
  22. Betancourt, Roger R, 1971. "The Estimation of Price Elasticities from Cross-Section Data under Additive Preferences," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 12(2), pages 283-92, June.
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Cited by:
  1. Gundlach, Erich, 1993. "Die Dienstleistungsnachfrage als Determinante des wirtschaftlichen Strukturwandels," Open Access Publications from Kiel Institute for the World Economy 763, Kiel Institute for the World Economy (IfW).
  2. Savadogo, Kimseyinga & Brandt, Jon A., 1988. "Household Food Demand in Burkina Faso: Implications for Food Policy," Agricultural Economics: The Journal of the International Association of Agricultural Economists, International Association of Agricultural Economists, vol. 2(4), December.
  3. Harold Alderman, 1988. "Estimates of Consumer Price Response in Pakistan using Market Prices as Data," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 27(2), pages 89-107.
  4. Sasaki, Kozo, 1996. "Consumer demand in Japan: An analysis using the Deaton-Muellbauer system," Japan and the World Economy, Elsevier, vol. 8(3), pages 335-351, September.
  5. EHTISHAM AHMAD & STEPHEN LuDLOW & NICHOLAS STERN, 1988. "Demand Response in Pakistan: A Modification of the Linear Expenditure System for 1976," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 27(3), pages 293-308.

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