This article deals with the specification of a locally flexible and theory-consistent system of mixed demand functions, a framework that allows for a rich set of possibilities about what is assumed as exogenous in a demand model. A coherent mixed demand system is derived by using the restricted expenditure function typically studied in the related area of rationed demands. The method is implemented by a new normalized quadratic (NQ) parameterization of the restricted expenditure function. The resulting NQ mixed demand system is illustrated with an application to a nine-good model of the Italian demand for vegetables.
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Publisher Info
Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number
12747.
Length: Date of creation: 06 Mar 2007 Date of revision: Publication status: Published in American Journal of Agricultural Economics, November 2007, Vol. 89, No. 4, pp. 1034-45. Handle: RePEc:isu:genres:12747
Contact details of provider: Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070 Phone: +1 515.294.6741 Fax: +1 515.294.0221 Email: Web page: http://www.econ.iastate.edu More information through EDIRC
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