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Demographic Variables in Demand Systems: The Case for Generality

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  • Ray, Ranjan

Abstract

This paper provides evidence in favour of greater generality in the demographic demand literature. We propose two demographic demand procedures. One extends the German model by allowing non-additive interaction between 'overheads' and 'Barten scaling.' The other extends 'Price Scaling,' by allowing the equivalence scale to vary with utility, and offers a test of 'Equivalence Scale Exactness' (ESE). The rejection of ESE is robust to the assumed demand functional forms (RNLPS, QAIDS), to items chosen, and the estimation method (MLE, GMM). The results show that published cell averages yield well determined estimates of the demographic generalisation parameters.

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Bibliographic Info

Article provided by Springer in its journal Empirical Economics.

Volume (Year): 21 (1996)
Issue (Month): 2 ()
Pages: 307-15

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Handle: RePEc:spr:empeco:v:21:y:1996:i:2:p:307-15

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Cited by:
  1. J. V. Meenakshi & Ranjan Ray, 1999. "Regional differences in India's food expenditure pattern: a complete demand systems approach," Journal of International Development, John Wiley & Sons, Ltd., vol. 11(1), pages 47-74.
  2. Laura Blow, 2003. "Demographics in demand systems," IFS Working Papers W03/18, Institute for Fiscal Studies.
  3. Lyssiotou, Panayiota, 2012. "Demographics and demand: Evaluation of alternative functional forms," Economics Letters, Elsevier, vol. 117(3), pages 627-631.

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