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Food Demand In Mexico: A Quasi-Maximum Likelihood Approach

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  • Gould, Brian W.
  • Yen, Steven T.
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    Abstract

    A growing trend in demand analysis during the last two decades is the use of household survey data. Detailed demographic information collected in these surveys allows treatment of heterogeneous preference and the typically large sample also allows estimation of large demand system that are otherwise not possible with aggregate time series. However, the use of household-level data is complicated by the censoring of the dependent variable especially for systems with disaggregated commodity definitions. To overcome the numerical problem of evaluating truncated multi-dimensional error term distributions, a Quasi-maximum likelihood method is used to estimate a censored 9-commodity demand system for a sample of urban Mexican households. The impacts of changes in price and expenditures are quantified as are the impacts of alternative household compositions evaluated via the use of an endogenously determined equivalence scale.

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    Bibliographic Info

    Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2002 Annual meeting, July 28-31, Long Beach, CA with number 19667.

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    Date of creation: 2002
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    Handle: RePEc:ags:aaea02:19667

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    Keywords: Demand and Price Analysis;

    References

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    1. Vassilis A. Hajivassiliou & Axel Borsch-Supan, 1990. "Smooth Unbiased Multivariate Probability Simulators for Maximum Likelihood Estimation of Limited Dependent Variable Models," Cowles Foundation Discussion Papers 960, Cowles Foundation for Research in Economics, Yale University.
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    6. Phipps, Shelley & Garner, Thesia I, 1994. "Are Equivalence Scales the Same for the United States and Canada?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 40(1), pages 1-17, March.
    7. Mark M. Pitt & Daniel L. Millimet, 1999. "Estimation of Coherent Demand Systems with Many Binding Non-Negativity Constraints," Working Papers 99-4, Brown University, Department of Economics.
    8. Deaton, Angus S & Muellbauer, John, 1986. "On Measuring Child Costs: With Applications to Poor Countries," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 720-44, August.
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    12. Wales, T. J. & Woodland, A. D., 1983. "Estimation of consumer demand systems with binding non-negativity constraints," Journal of Econometrics, Elsevier, vol. 21(3), pages 263-285, April.
    13. Andersen, Torben G., 2000. "Simulation-Based Econometric Methods," Econometric Theory, Cambridge University Press, vol. 16(01), pages 131-138, February.
    14. Keane, Michael, 1993. "Simulation estimation for panel data models with limited dependent variables," MPRA Paper 53029, University Library of Munich, Germany.
    15. Heien, Dale & Wessells, Cathy Roheim, 1990. "Demand Systems Estimation with Microdata: A Censored Regression Approach," Journal of Business & Economic Statistics, American Statistical Association, vol. 8(3), pages 365-71, July.
    16. Lewbel, Arthur, 1989. "Household equivalence scales and welfare comparisons," Journal of Public Economics, Elsevier, vol. 39(3), pages 377-391, August.
    17. Dreze, Jean & Srinivasan, P. V., 1997. "Widowhood and poverty in rural India: Some inferences from household survey data," Journal of Development Economics, Elsevier, vol. 54(2), pages 217-234, December.
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    Cited by:
    1. Fabiosa, Jacinto F. & Jensen, Helen H., 2003. "Usefulness of Incomplete Demand Model in Censored Demand System Estimation," 2003 Annual meeting, July 27-30, Montreal, Canada 21923, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Fabiosa, Jacinto F. & Jensen, Helen H. & Yan, Dong, 2005. "Household Welfare Cost of the Indonesian Macroeconomic Crisis," 2005 Annual meeting, July 24-27, Providence, RI 19311, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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