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A Note On Imposing Local Curvature In Generalized Leontief Models

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  • SERLETIS, APOSTOLOS
  • SHAHMORADI, ASGHAR

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.

Suggested Citation

  • Serletis, Apostolos & Shahmoradi, Asghar, 2007. "A Note On Imposing Local Curvature In Generalized Leontief Models," Macroeconomic Dynamics, Cambridge University Press, vol. 11(2), pages 290-294, April.
    • Handle: RePEc:cup:macdyn:v:11:y:2007:i:02:p:290-294_05
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    References listed on IDEAS

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    1. 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 331-338, July.
    2. Diewert, Walter E & Wales, Terence J, 1987. "Flexible Functional Forms and Global Curvature Conditions," Econometrica, Econometric Society, vol. 55(1), pages 43-68, January.
    3. Fuss, Melvyn & McFadden, Daniel (ed.), 1978. "Production Economics: A Dual Approach to Theory and Applications," Elsevier Monographs, Elsevier, edition 1, number 9780444850133.
    4. 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 303-312, July.
    5. Christensen, Laurits R & Jorgenson, Dale W & Lau, Lawrence J, 1975. "Transcendental Logarithmic Utility Functions," American Economic Review, American Economic Association, vol. 65(3), pages 367-383, June.
    6. Moschini, Giancarlo, 1999. "Imposing Local Curvature Conditions in Flexible Demand Systems," Journal of Business & Economic Statistics, American Statistical Association, vol. 17(4), pages 487-490, October.
    7. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-326, June.
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    Cited by:

    1. Miller, Stephen M. & Martins, Luis Filipe & Gupta, Rangan, 2019. "A Time-Varying Approach Of The Us Welfare Cost Of Inflation," Macroeconomic Dynamics, Cambridge University Press, vol. 23(2), pages 775-797, March.
    2. repec:ipg:wpaper:2014-474 is not listed on IDEAS
    3. Ling-yun He & Li Liu, 2016. "The demand for road transport in China: imposing theoretical regularity and flexible functional forms selection," Papers 1612.02656, arXiv.org.
    4. Dongfeng Chang & Apostolos Serletis, 2014. "The Demand For Gasoline: Evidence From Household Survey Data," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 29(2), pages 291-313, March.
    5. Chang, Dongfeng & Serletis, Apostolos, 2012. "Imposing local curvature in the QUAIDS," Economics Letters, Elsevier, vol. 115(1), pages 41-43.
    6. Serletis, Apostolos & Shahmoradi, Asghar, 2010. "Consumption effects of government purchases," Journal of Macroeconomics, Elsevier, vol. 32(3), pages 892-905, September.
    7. Senia, Mark & Dharmasena, Senarath, 2017. "Pre-Determined Demand and Theoretical Regularity Conditions: Their Importance for Consumer Food Demand Using AIDS and Policy Analysis Implications," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252740, Southern Agricultural Economics Association.
    8. Asghar Shahmoradi & Afshin Honarvar, 2008. "Gasoline subsidy and consumer surplus in the Islamic Republic of Iran," OPEC Energy Review, Organization of the Petroleum Exporting Countries, vol. 32(3), pages 232-245, September.

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    More about this item

    JEL classification:

    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation

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