Modelling addictive consumption: some theoretical and econometric issues
AbstractThis note addresses some theoretical and econometric aspects of modelling addictive consumption. We show that the solution to the optimization problem leads to a specification of the reduced form equation which is different from what has been estimated in the literature. We also demonstrate that it is valid to apply OLS to estimate this reduced form equation and those used in the literature although the underlying variables are integrated.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Applied Economics Letters.
Volume (Year): 6 (1999)
Issue (Month): 3 ()
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Other versions of this item:
- Chongwoo Choe & Imad A Moosa, 1997. "Modelling Addictive Consumption: Some Theoretical and Econometric Issues," Working Papers 1997.10, School of Economics, La Trobe University.
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