In this paper we estimate quadratic food Engel curves with measurement error using the 1994 Ethiopian Urban Household Budget Survey. In sharp contrast to the findings from developed countries, food share is found to increase with expenditure, and only starts to decline after some threshold level of expenditure. We establish the robustness of this inverted-U relationship by estimating a more flexible semiparametric model that corrects for the endogeneity of expenditure. The potential policy distortion that may result from neglecting the problem of measurement error in the estimation of Engel curves is also discussed.
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Paper provided by Department of Economics, University of Leicester in its series Discussion Papers in Economics with number
03/17.
Length: Date of creation: Dec 2003 Date of revision: Handle: RePEc:lec:leecon:03/17
Contact details of provider: Postal: Department of Economics University of Leicester, University Road. Leicester. LE1 7RH. UK Phone: +44 (0)116 252 2887 Fax: +44 (0)116 252 2908 Email: Web page: http://www.le.ac.uk/economics/
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Aigner, Dennis J. & Hsiao, Cheng & Kapteyn, Arie & Wansbeek, Tom, 1984.
"Latent variable models in econometrics,"
Handbook of Econometrics,
in: Z. Griliches†& M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 2, chapter 23, pages 1321-1393
Elsevier.
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