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Regular and Estimable Inverse Demand Systems: A Distance Function Approach Author info | Abstract | Publisher info | Download info | Related research | Statistics Gary K.K. Wong
Keith R. McLaren ()
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To be useful for realistic policy simulation in an environment of rapid structural change, inverse demand systems must remain regular over substantial variations in quantities. The distance function is a convenient vehicle for generating such systems. While it directly yields Hicksian inverse demand functions, those functions will not usually have an explicit representation in terms of the observable variables. Note however that this problem need not hinder estimation and could be solved by using the numerical inversion estimation approach. This paper develops the formal theory for using distance functions in this context, and demonstrates the operational feasibility of the method.
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Paper provided by Monash University, Department of Econometrics and Business Statistics in its series Monash Econometrics and Business Statistics Working Papers with number
6/02.
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Length: 32 pages
Date of creation: Jul 2002Date of revision:
Handle: RePEc:msh:ebswps:2002-6Contact details of provider: Postal: PO Box 11E, Monash University, Victoria 3800, Australia Phone: +61-3-9905-2489 Fax: +61-3-9905-5474 Email: Web page: http://www.buseco.monash.edu.au/depts/ebs/ More information through EDIRC
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Keywords: Inverse Demands ; Distance Functions ; Numerical Inversion Estimation Method ; Separability. ; Other versions of this item:
Find related papers by JEL classification: D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
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Alan A. Powell & Keith R. McLaren & K.R. Pearson & Maureen Rimmer, 2002.
"Cobb-Douglas Utility - Eventually! ,"
Monash Econometrics and Business Statistics Working Papers
12/02, Monash University, Department of Econometrics and Business Statistics.
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