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Building Gorman's Nest

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Author Info
Rulon D. Pope
Jeffrey T. LaFrance
Timothy K. M.Beatty

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Abstract

Gorman's class of Engel curve demand models is extended to incomplete demand systems. The Gorman class of aggregable incomplete demand systems admits any transformation of deflated income. A maximum rank of three for the demand equations is a corollary of Slutsky symmetry. Models of incomplete demand systems are developed that nest the rank of the demand system and functional form of the income variables, can be globally restricted to be weakly integrable, can be estimated consistently and efficiently with aggregate market data, and permit inferences on the impacts of policies on consumption and economic welfare for identifiable groups of consumers

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Publisher Info
Paper provided by Econometric Society in its series Econometric Society 2004 Australasian Meetings with number 26.

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Date of creation: 11 Aug 2004
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Handle: RePEc:ecm:ausm04:26

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Related research
Keywords: Aggregation; incomplete demand systems; Gorman Engel curves; weak integrability;

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Find related papers by JEL classification:
D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
E21 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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  1. LaFrance, Jeffrey T., 2004. "Integrability of the linear approximate almost ideal demand system," Economics Letters, Elsevier, vol. 84(3), pages 297-303, September. [Downloadable!] (restricted)
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  2. Agnew, G. K. & Beatty, Timothy K. M. & LaFrance, Jeffrey T. & Pope, Rulon D., 2000. "The U.S. income distribution and Gorman Engel curves for food," CUDARE Working Paper Series 911, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
  3. Moschini, GianCarlo, 2002. "Units of Measurement and the 'Stone Index' in Demand System Estimation," Staff General Research Papers 5058, Iowa State University, Department of Economics.
  4. Russell, Thomas & Farris, Frank, 1993. "The geometric structure of some systems of demand equations," Journal of Mathematical Economics, Elsevier, vol. 22(4), pages 309-325. [Downloadable!] (restricted)
  5. Jerison, Michael, 1993. "Russell on Gorman's Engel curves : A correction," Economics Letters, Elsevier, vol. 43(2), pages 171-175. [Downloadable!] (restricted)
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  6. Moschini, Giancarlo & Meilke, K.D., 2004. "Modeling the Pattern of Structural Change in U.S. Meat Demand," Staff General Research Papers 11266, Iowa State University, Department of Economics.
  7. Howe, Howard & Pollak, Robert A & Wales, Terence J, 1979. "Theory and Time Series Estimation of the Quadratic Expenditure System," Econometrica, Econometric Society, vol. 47(5), pages 1231-47, September. [Downloadable!] (restricted)
  8. LaFrance, Jeffrey T., 1998. "The structure of U.S. food demand," CUDARE Working Paper Series 862, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
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  9. Pashardes, Panos, 1993. "Bias in Estimating the Almost Ideal Demand System with the Stone Index Approximation," Economic Journal, Royal Economic Society, vol. 103(419), pages 908-15, July. [Downloadable!] (restricted)
  10. Beatty, Timothy K. M. & LaFrance, Jeffrey T., 2001. "Income elasticity and functional form," CUDARE Working Paper Series 922, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
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  11. Russell, Thomas, 1983. "On a theorem of Gorman," Economics Letters, Elsevier, vol. 11(3), pages 223-224. [Downloadable!] (restricted)
  12. LaFrance, J. T. & Beatty, T. K. M. & Pope, R. D. & Agnew, G. K., 2002. "Information theoretic measures of the income distribution in food demand," Journal of Econometrics, Elsevier, vol. 107(1-2), pages 235-257, March. [Downloadable!] (restricted)
  13. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-26, June. [Downloadable!] (restricted)
  14. Muellbauer, John, 1975. "Aggregation, Income Distribution and Consumer Demand," Review of Economic Studies, Blackwell Publishing, vol. 42(4), pages 525-43, October. [Downloadable!] (restricted)
  15. Lewbel, Arthur, 1987. "Characterizing Some Gorman Engel Curves," Econometrica, Econometric Society, vol. 55(6), pages 1451-59, November. [Downloadable!] (restricted)
  16. Anderson, Gordon & Blundell, Richard, 1983. "Testing Restrictions in a Flexible Dynamic Demand System: An Application to Consumers' Expenditure in Canada," Review of Economic Studies, Blackwell Publishing, vol. 50(3), pages 397-410, July. [Downloadable!] (restricted)
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