Modelling Addictive Consumption: Some Theoretical and Econometric Issues
AbstractThis paper addresses some theoretical and econometric aspects of modelling addictive consumption. We show that the solution to the optimisation problem leads to a specification of the reduced form equation which is different from what is found in the literature. We also demonstrate that it is also valid to apply OLS to estimate this reduced form equation and those used in the literature although the underlying variables are integrated.
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Bibliographic InfoPaper provided by School of Economics, La Trobe University in its series Working Papers with number 1997.10.
Length: 9 pages
Date of creation: 1997
Date of revision:
Econometrics; Consumers EDIRC Provider-Institution: RePEc:edi:smlatau;
Other versions of this item:
- Chongwoo Choe & Imad Moosa, 1999. "Modelling addictive consumption: some theoretical and econometric issues," Applied Economics Letters, Taylor & Francis Journals, vol. 6(3), pages 143-146.
- Chongwoo Choe & Imad A Moosa, 1997. "Modelling Addictive Consumption: Some Theoretical and Econometric Issues," Working Papers 1997.10, School of Economics, La Trobe University.
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