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Flexible Multistage Demand System Based on Indirect Separability, A

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The notion of indirect separability is exploited to derive a new multistage demand system. The model allows a consistent parameterization of demand relations at various budgeting stages and it fulfills the requirement of flexibility while satisfying separability globally. Two propositions are derived to characterize flexible and separable functional forms, which lead to the specification of a flexible and separable translog (FAST) demand system. The model is particularly attractive for modeling large complete demand systems, and is illustrated with an application to Canadian food demand.

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Paper provided by Center for Agricultural and Rural Development (CARD) at Iowa State University in its series Center for Agricultural and Rural Development (CARD) Publications with number 00-wp265.

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Date of creation: Dec 2000
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Handle: RePEc:ias:cpaper:00-wp265

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Cited by:
  1. Bergtold, Jason S. & Akobundu, Eberechukwu & Peterson, Everett B., 2004. "The FAST Method: Estimating Unconditional Demand Elasticities for Processed Foods in the Presence of Fixed Effects," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 29(02), August.
  2. Beghin, John C. & Bureau, Jean-Christophe & Drogue, Sophie, 2003. "The Calibration Of Incomplete Demand Systems In Quantitative Analysis," 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa 25820, International Association of Agricultural Economists.
  3. Maria Erlinda M. Mutuc & Suwen Pan & Roderick M. Rejesus, 2007. "Household vegetable demand in the Philippines: Is there an urban-rural divide?," Agribusiness, John Wiley & Sons, Ltd., vol. 23(4), pages 511-527.
  4. Bergtold, Jason S. & Peterson, Everett B., 2005. "Introducing Asymmetric Separability in the FAST Multistage Demand System," 2005 Annual meeting, July 24-27, Providence, RI 19497, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  5. Per Hjertstrand & James Swofford, 2012. "Revealed preference tests for consistency with weakly separable indirect utility," Theory and Decision, Springer, vol. 72(2), pages 245-256, February.

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