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The Almost Ideal and Translog Demand Systems

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  • Holt, Matthew T.
  • Goodwin, Barry K.

Abstract

This chapter reviews the specification and application of the Deaton and Muellbauer (1980) Almost Ideal Demand System (AIDS) and the Christensen, Jorgensen, and Lau (1975) tranlog (TL) demand system. In so doing we examine various refinements to these models, including ways of incorporating demographic effects, methods by which curvature conditions can be imposed, and issues associated with incorporating structural change and seasonal effects. We also review methods for adjusting for autocorrelation in the model's residuals. A set of empirical examples for the AIDS and a the log TL version of the translog based on historical meat price and consumption data for the United States are also presented.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 15092.

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Date of creation: 14 Mar 2009
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Handle: RePEc:pra:mprapa:15092

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Keywords: Almost ideal demand system; Autocorrelation; Curvature; Meat Demand; Translog;

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