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Flexible Consumer Demand Systems and Linear Estimation: Food in India

Author

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  • Gurushri Swamy
  • Hans P. Binswanger

Abstract

Demand equations in real income and nominal prices can be obtained directly by differentiating a cost function in which output is replaced by real income. This derivation is possible because recent advances show that certain index numbers provide close approximation to real income without knowledge of the utility function parameters. Three flexible functional forms corresponding to well-known flexible cost functions were used to estimate food demand elasticities. Time-series and cross-sectional data from ten Indian states for twenty years were used. The estimates provide a complete set of expenditure, price, and cross-price elasticities for four commodities, some close substitutes.

Suggested Citation

  • Gurushri Swamy & Hans P. Binswanger, 1983. "Flexible Consumer Demand Systems and Linear Estimation: Food in India," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 65(4), pages 675-684.
    • Handle: RePEc:oup:ajagec:v:65:y:1983:i:4:p:675-684.
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    Cited by:

    1. Pampanini, Rossella & Marchini, Andrea & Diotallevi, Francesco, 2010. "A quantitative analysis of olive oil market in Italy," MPRA Paper 40638, University Library of Munich, Germany.
    2. Abler, David G. & Sukhatme, Vasant, 1991. "Indian Agricultural Price Policy Revisited," 1991 Annual Meeting, August 4-7, Manhattan, Kansas 271262, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Guillermo Donoso & José Cancino, 1999. "Estimación de un Sistema de Demanda Censurado: El Caso del Gran Santiago," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 36(109), pages 979-1004.
    4. Mubarik Ali & Abedullah, 1998. "Supply, Demand, and Policy Environment for Pulses in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 37(1), pages 35-52.
    5. C. Richard Shumway, 1993. "Production economics: Worthwhile investment?," Agricultural Economics, International Association of Agricultural Economists, vol. 9(2), pages 89-108, August.
    6. Peters, Mark A. & Spreen, Thomas H., 1989. "Price Endogenous Mathematical Programming Models And Integrability: An Alternative Approach," 1989 Annual Meeting, July 30-August 2, Baton Rouge, Louisiana 270478, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    7. Falconi, Cesar & Senauer, Benjamin, 1991. "Aggregation Over Consumers And The Estimation Of A Demand System For U.S. Food," Staff Papers 14021, University of Minnesota, Department of Applied Economics.
    8. Howard, Wayne H. & Shumway, C. Richard, 1987. "A Comparison of Two Functional Forms in Dynamic Analysis," Working Papers 244829, University of Guelph, Department of Food, Agricultural and Resource Economics.
    9. Ornelas, Fermin S. & Shumway, C. Richard, 1993. "Multidimensional Evaluation Of Flexible Functional Forms For Production Analysis," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 25(2), pages 1-13, December.
    10. Shuto, Hisato, 2000. "Fertilizer Subsidy Reform in the Indian Foodgrain Market: A Comparative Static Analysis with Respect to an Increase in Fertilizer Price," Japanese Journal of Agricultural Economics (formerly Japanese Journal of Rural Economics), Agricultural Economics Society of Japan (AESJ), vol. 2.
    11. Llanto, Gilberto M., 1998. "Philippine Households' Response to Price and Income Changes," Research Paper Series RPS 1998-02, Philippine Institute for Development Studies.
    12. Parikh, Kirit S. & Parikh, Jyoti K. & Ghosh, Probal P., 2018. "Can India grow and live within a 1.5 degree CO2 emissions budget?," Energy Policy, Elsevier, vol. 120(C), pages 24-37.
    13. Wilson, William W., 1994. "Demand For Wheat Classes By Pacific Rim Countries," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 19(1), pages 1-13, July.
    14. Kumar, Praduman & Kumar, Anjani & Parappurathu, Shinoj & Raju, S.S., 2011. "Estimation of Demand Elasticity for Food Commodities in India," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 24(1), June.
    15. Abdelmagid, Banaga D. & Wohlgenant, Michael K. & Safley, Charles D., 1996. "Demand For Plants Sold In North Carolina Garden Centers," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 25(1), pages 1-10, April.
    16. Minot, Nicholas W., 1997. "Devaluation and Household Welfare in Rwanda," 1997 Occasional Paper Series No. 7 198190, International Association of Agricultural Economists.

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