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Demand System Choice Based On Testing The Engel Curve Specification

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Author Info
Soregaroli, Claudio
Huff, Karen
Meilke, Karl
Abstract

It is common to use a demand systems approach in estimating the key parameters from household consumption data. In conducting these studies the researcher is faced with selecting a functional form. In turn, each functional form implies a particular shape for the Engel curves. This analysis highlights the importance of testing the shape of Engel curves, especially if the researcher is interested in elasticity estimates well away from the sample mean. Using consumption data for selected households in Italy it is shown that many popular functional forms are rejected by the data.

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Paper provided by University of Guelph, Department of Food, Agricultural and Resource Economics in its series Working Papers with number 34139.

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Date of creation: 2002
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Handle: RePEc:ags:uguewp:34139

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Keywords: Demand and Price Analysis;

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  2. Deaton, Angus, 1987. "Estimation of own- and cross-price elasticities from household survey data," Journal of Econometrics, Elsevier, vol. 36(1-2), pages 7-30. [Downloadable!] (restricted)
  3. Moschini, Giancarlo & Rizzi, P. L, 1998. "La Struttura dei Consumi delle Famiglie in Italia," Staff General Research Papers 1192, Iowa State University, Department of Economics.
  4. Christensen, Laurits R & Jorgenson, Dale W & Lau, Lawrence J, 1975. "Transcendental Logarithmic Utility Functions," American Economic Review, American Economic Association, vol. 65(3), pages 367-83, June. [Downloadable!] (restricted)
  5. Aasness, Jorgen & Rodseth, Asbjorn, 1983. "Engel curves and systems of demand functions," European Economic Review, Elsevier, vol. 20(1-3), pages 95-121, January. [Downloadable!] (restricted)
  6. Delgado, Miguel A & Miles, Daniel, 1997. "Household Characteristics and Consumption Behaviour: A Nonparametric Approach," Empirical Economics, Springer, vol. 22(3), pages 409-29.
  7. James Banks & Richard Blundell & Arthur Lewbel, 1997. "Quadratic Engel Curves And Consumer Demand," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 527-539, November. [Downloadable!] (restricted)
  8. Lewbel, Arthur, 1987. "Characterizing Some Gorman Engel Curves," Econometrica, Econometric Society, vol. 55(6), pages 1451-59, November. [Downloadable!] (restricted)
  9. Giles, David E A & Hampton, Peter, 1985. "An Engel Curve Analysis of Household Expenditure in New Zealand," The Economic Record, The Economic Society of Australia, vol. 61(172), pages 450-62, March.
  10. Keen, Michael, 1986. "Zero Expenditures and the Estimation of Engel Curves," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 1(3), pages 277-86, July. [Downloadable!] (restricted)
  11. Laitinen, Kenneth & Theil, Henri & Raparla, Tejaswi, 1983. "A generalization of working's model," Economics Letters, Elsevier, vol. 13(1), pages 97-100. [Downloadable!] (restricted)
  12. De Witte, M. A. C. & Cramer, J. S., 1986. "Functional form of engel curves for foodstuffs," European Economic Review, Elsevier, vol. 30(4), pages 909-913, August. [Downloadable!] (restricted)
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