On the Estimation of Demand Systems through Consumption Efficiency
AbstractThe authors consider a Bayesian implementation of a new approach to estimating demand systems. This approach, suggested by Hal R. Varian (1990), is based on a generalization of Sidney Afriat's (1967) efficiency index. The model the authors propose leads to a very tractable posterior and predictive analysis, yet allows for interesting economic interpretations. They conduct a sensitivity analysis with respect to the prior in an application to annual aggregate U.S. consumption data and conclude that the sample is quite informative. Average efficiency and expected budget shares are examined in some detail. Copyright 1996 by MIT Press.
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Bibliographic InfoArticle provided by MIT Press in its journal Review of Economics & Statistics.
Volume (Year): 78 (1996)
Issue (Month): 3 (August)
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Web page: http://mitpress.mit.edu/journals/
Other versions of this item:
- Eduardo Ley & Mark F.J. Steel, 1995. "On the Estimation of Demand Systems Through Consumption Efficiency," Econometrics 9503001, EconWPA, revised 22 Feb 1996.
- C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
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- Koop, G. & Osiewalski, J. & Steel, M.F.J., 1994.
"Bayesian efficiency analysis with a flexible form: The aim cost function,"
1994-13, Tilburg University, Center for Economic Research.
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- Inha Oh & Jeong-Dong Lee & Seogwon Hwang & Almas Heshmati, 2010. "Analysis of product efficiency in the Korean automobile market from a consumer’s perspective," Empirical Economics, Springer, vol. 38(1), pages 119-137, February.
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