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The EASI Demand System : Evidence from China Household

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  • Song, Ze
  • Li, Lianyou
  • Ma, Chao
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    Abstract

    We have applied the Exact Affine Stone Index(EASI) implicit Marshallian demand system ,invented by Lewbel and Pendakur (2009),and iterate three stage least squares to analysis Chinese household consumer demand in urban area.Our results show a demand system rank to equal five support the conclusion of Lewbel and Pendakur(2009), and the applicability of the model with or without interaction terms. Heterogeneity demographic characteristics and price effect Chinese household consumer demand system in urban area. From 1995 to 2007, the ratio of food and transportation-communication in total expenditure decrease ,and other expenditure ratio increase.

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    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 48435.

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    Date of creation: 18 Jul 2013
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    Handle: RePEc:pra:mprapa:48435

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    Keywords: Engel curves; The EASI Demand System; Chinese Household;

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    1. Kuo S. Huang Fred Gale, 2009. "Food demand in China: income, quality, and nutrient effects," China Agricultural Economic Review, Emerald Group Publishing, Emerald Group Publishing, vol. 1(4), pages 395-409, August.
    2. Wolfgang HÄRDLE & Michael JERISON, 1991. "Cross section Engel Curves over Time," Discussion Papers (REL - Recherches Economiques de Louvain), Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) 1991045, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    3. Arthur Lewbel, 2003. "A rational rank four demand system," Journal of Applied Econometrics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 18(2), pages 127-135.
    4. Ryan, David L. & Wales, Terence J., 2000. "Imposing local concavity in the translog and generalized Leontief cost functions," Economics Letters, Elsevier, Elsevier, vol. 67(3), pages 253-260, June.
    5. Richard Blundell & Alan Duncan & Krishna Pendakur, 1998. "Semiparametric estimation and consumer demand," Journal of Applied Econometrics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 13(5), pages 435-461.
    6. W. Erwin Diewert & T.J. Wales, 1989. "Flexible Functional Forms and Global Curvature Conditions," NBER Technical Working Papers, National Bureau of Economic Research, Inc 0040, National Bureau of Economic Research, Inc.
    7. Brown, Bryan W & Walker, Mary Beth, 1989. "The Random Utility Hypothesis and Inference in Demand Systems," Econometrica, Econometric Society, Econometric Society, vol. 57(4), pages 815-29, July.
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