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Functional Separability within a Quadratic Inverse Demand System

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Author Info
Moro, Daniele
Sckokai, Paolo

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Abstract

In this paper, a quadratic inverse (almost ideal) demand system (IQUAIDS) is derived, that generalizes the inverse (almost ideal) demand system (IAIDS). Starting from a flexible parameterization of the distance function, this model allows a more flexible specification by overcoming the potential restrictiveness of linear scale curves. However, at a point of normalization, the IQUAIDS boils down to the IAIDS, thus the additional flexibility pertains only to the specification of scale elasticities away from the point of approximation. Previous work on functional separability is extended to the case of inverse demands, and necessary and sufficient conditions for weak separability of the direct and indirect utility function derived, in terms of the Antonelli elasticities of complementarity and of the scale elasticities. Their proper parametric representation within the inverse specification is also derived. An empirical application to fish demand in Italy is provided, mainly for illustrative purposes. Copyright 2002 by Taylor and Francis Group

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Article provided by Taylor and Francis Journals in its journal Applied Economics.

Volume (Year): 34 (2002)
Issue (Month): 3 (February)
Pages: 285-93
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Handle: RePEc:taf:applec:v:34:y:2002:i:3:p:285-93

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  1. Michele Baggio & Jean-Paul Chavas, 2006. "On the Consumer Value of Environmental Diversity," Working Papers 35, Università di Verona, Dipartimento di Scienze economiche. [Downloadable!]
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This page was last updated on 2009-12-5.

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