Using an Almost Ideal Demand System in a Macro-Micro Modelling Context to Analyse Poverty and Inequalities
AbstractIn this paper, we explore the contribution of introducing a flexible form for household consumption in a macro-micro modelling context for poverty and income distribution analysis. The almost ideal demand system exhibits interesting features allowing for the introduction of inter-household heterogeneity in a rigorous fashion. In order to illustrate the contribution of the AIDS system in the macro-micro modelling context, we perform a comparative analysis with an equivalent model using a LES demand system and a CGE with representative households including an AIDS. Results show the strong contribution of using an almost ideal demand system in a microsimulation context and its value added versus a linear expenditure system to analyse poverty and income distribution changes following a policy simulation.
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Bibliographic InfoPaper provided by Departement d'Economique de la Faculte d'administration à l'Universite de Sherbrooke in its series Cahiers de recherche with number 10-04.
Length: 28 pages
Date of creation: 04 Feb 2010
Date of revision:
Computable General Equilibrium Models; Estimation; Personal Income and Wealth Distribution; Measurement and Analysis of Poverty;
Find related papers by JEL classification:
- I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
- C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
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