Flexible but Parsimonious Demand Designs: The Case of Gasoline
AbstractWe consider expectations of the form E[logy|x] = Σ j=1 -super-d α j log x j as a good starting point for a more general analysis. We show why this naturally leads to the following flexible functional form: E[y|x] = f(Σ j=1 -super-dh j(x j)), where f(ċ) and the h j(ċ)'s are estimated by cubic splines. The main objective of this paper is to provide a straightforward method to estimate E[y|x]. We demonstrate the usefulness of this approach by estimating gasoline demand from the 1994 RTECS data set, and in doing so, uncover interesting relationships of income and age to expected gasoline use. Â© 2003 President and Fellows of Harvard College and the Massachusetts Institute of Technology.
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Bibliographic InfoArticle provided by MIT Press in its journal Review of Economics and Statistics.
Volume (Year): 85 (2003)
Issue (Month): 3 (August)
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- Manzan, sebastiano & Zerom, Dawit, 2008. "A Semiparametric Analysis of Gasoline Demand in the US: Reexamining The Impact of Price," MPRA Paper 14386, University Library of Munich, Germany.
- Wadud, Zia & Noland, Robert B. & Graham, Daniel J., 2010. "A semiparametric model of household gasoline demand," Energy Economics, Elsevier, vol. 32(1), pages 93-101, January.
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