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The Calibration Of Incomplete Demand Systems In Quantitative Analysis

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Author Info
Beghin, John C.
Bureau, Jean-Christophe
Drogue, Sophie

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Abstract

We introduce an easily implemented and flexible calibration technique for partial demand systems, combining recent developments in incomplete demand systems and a set of restrictions conditioned on the available elasticity estimates. The technique accommodates various degrees of knowledge on cross-price elasticities, satisfies curvature restrictions, and allows the recovery of an exact welfare measure for policy analysis. The technique is illustrated with a partial demand system for food consumption in Korea for different states of knowledge on cross-price effects. The consumer welfare impact of food and agricultural trade liberalization is measured.

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Paper provided by International Association of Agricultural Economists in its series 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa with number 25820.

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Date of creation: 2003
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Handle: RePEc:ags:iaae03:25820

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Keywords: calibration; exact welfare measure; incomplete demand systems; policy analysis.; Demand and Price Analysis;

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References listed on IDEAS
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  1. Keller, Wouter J., 1984. "Some simple but flexible differential consumer demand systems," Economics Letters, Elsevier, vol. 16(1-2), pages 77-82. [Downloadable!] (restricted)
  2. Fang, Cheng & Beghin, John C., 2002. "Urban Demand for Edible Oils and Fats in China: Evidence from Household Survey Data," Journal of Comparative Economics, Elsevier, vol. 30(4), pages 732-753, December. [Downloadable!] (restricted)
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  3. LaFrance, Jeffrey T., 1985. "Linear demand functions in theory and practice," Journal of Economic Theory, Elsevier, vol. 37(1), pages 147-166, October. [Downloadable!] (restricted)
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  1. Matthey, Holger & Diop, Ndiame & Beghin, John C. & Sewadeh, Mirvat, 2003. "The Impact Of Groundnut Trade Liberalization: Implication For The Doha Round," 2003 Annual meeting, July 27-30, Montreal, Canada 22032, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  2. John C. Beghin & Holger Matthey & Ndiame Diop & Mirvat Sewadeh, 2003. "Groundnut Trade Liberalization: A South-South Debate?," Center for Agricultural and Rural Development (CARD) Publications 03-wp347, Center for Agricultural and Rural Development (CARD) at Iowa State University. [Downloadable!]
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  3. Beghin, John C. & Diop, Ndiame & Matthey, Holger, 2003. "Groundnut Trade Liberalization: Could the South Help the South?," Staff General Research Papers 10875, Iowa State University, Department of Economics. [Downloadable!]
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  4. Beghin, John C. & Matthey, Holger, 2003. "Modeling World Peanut Product Markets: A Tool for Agricultural Trade Policy Analysis," Staff General Research Papers 10365, Iowa State University, Department of Economics. [Downloadable!]
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