Estimation of demand systems based on elasticities of substitution
AbstractThis paper develops a model for demand-system estimations, whose coefficients are own-price Marshallian elasticities and elasticities of substitution between goods. The model satisfies the homogeneity, symmetry and, eventually, adding-up restrictions implied by consumer theory, and is primarily useful for the estimation of the demands of several goods of the same industry or group of products. The characteristics of the model are compared to other existing alternatives (logarithmic, translog, AIDS and QUAIDS demand systems). The model is finally applied to estimate the demands for several carbonated soft drinks in Argentina, and its results are presented, together with the ones obtained with the other estimation methods.
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Bibliographic InfoPaper provided by Universidad del CEMA in its series CEMA Working Papers: Serie Documentos de Trabajo. with number 322.
Length: 22 pages
Date of creation: Jun 2006
Date of revision:
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More information through EDIRC
Demand Systems; Elasticity of Substitution; Simultaneous Equations; Carbonated Soft Drinks;
Other versions of this item:
- Coloma, German, 2009. "Estimation of Demand Systems Based on Elasticities of Substitution," Review of Applied Economics, Review of Applied Economics, vol. 5(1-2).
- C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
- C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-07-21 (All new papers)
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