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A Note on Imposing Local Curvature in Generalized Leontief Models

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Author Info
Apostolos Serletis (University of Calgary)
Asghar Shahmoradi (University of Calgary)

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Abstract

In this paper, we build on Ryan and Wales (1998) and Moschini (1999) and impose curvature conditions locally on the generalized Leontief model, introduced by Diewert (1974). In doing so, we exploit the Hessian matrix of second order derivatives of the reciprocal indirect utility function, unlike Ryan and Wales (1998) and Moschini (1999) who exploit the Slutsky matrix.

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Paper provided by EconWPA in its series GE, Growth, Math methods with number 0509005.

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Date of creation: 27 Sep 2005
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Handle: RePEc:wpa:wuwpge:0509005

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Find related papers by JEL classification:
C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Estimation
C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation

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  1. Diewert, W E & Wales, T J, 1988. "Normalized Quadratic Systems of Consumer Demand Functions," Journal of Business & Economic Statistics, American Statistical Association, vol. 6(3), pages 303-12, July.
  2. Christensen, Laurits R & Jorgenson, Dale W & Lau, Lawrence J, 1975. "Transcendental Logarithmic Utility Functions," American Economic Review, American Economic Association, vol. 65(3), pages 367-83, June. [Downloadable!] (restricted)
  3. Diewert, Walter E & Wales, Terence J, 1987. "Flexible Functional Forms and Global Curvature Conditions," Econometrica, Econometric Society, vol. 55(1), pages 43-68, January. [Downloadable!] (restricted)
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  4. Ryan, David L & Wales, Terence J, 1998. "A Simple Method for Imposing Local Curvature in Some Flexible Consumer-Demand Systems," Journal of Business & Economic Statistics, American Statistical Association, vol. 16(3), pages 331-38, July.
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  5. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-26, June. [Downloadable!] (restricted)
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