Demand System Choice Based On Testing The Engel Curve Specification
AbstractIt 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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Bibliographic InfoPaper provided by University of Guelph, Department of Food, Agricultural and Resource Economics in its series Working Papers with number 34139.
Date of creation: 2002
Date of revision:
Demand and Price Analysis;
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