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New products with a symmetric AIDS expenditure function

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  • Feenstra, Robert C.

Abstract

We study a symmetric AIDS expenditure function that allows for variation in the range of goods. Solving for the reservation prices for goods not available, a convenient form for the expenditure function is obtained. This functional form should prove useful in monopolistic competition models were the range of products changes due to entry and exit.

Suggested Citation

  • Feenstra, Robert C., 2010. "New products with a symmetric AIDS expenditure function," Economics Letters, Elsevier, vol. 106(2), pages 108-111, February.
  • Handle: RePEc:eee:ecolet:v:106:y:2010:i:2:p:108-111
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    References listed on IDEAS

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    1. Ina Simonovska, 2009. "Income Differences and Prices of Tradables," 2009 Meeting Papers 692, Society for Economic Dynamics.
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    4. Kristian Behrens & Giordano Mion & Yasusada Murata & Jens Südekum, 2014. "Trade, Wages, And Productivity," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 55, pages 1305-1348, November.
    5. Feenstra, Robert C., 2003. "A homothetic utility function for monopolistic competition models, without constant price elasticity," Economics Letters, Elsevier, vol. 78(1), pages 79-86, January.
    6. Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-959, December.
    7. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    8. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-326, June.
    9. Ina Simonovska, 2015. "Income Differences and Prices of Tradables: Insights from an Online Retailer," Review of Economic Studies, Oxford University Press, vol. 82(4), pages 1612-1656.
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    Cited by:

    1. Andrea Saayman & Isabel Cortés-Jiménez, 2013. "Modelling Intercontinental Tourism Consumption in South Africa: A Systems-of-Equations Approach," South African Journal of Economics, Economic Society of South Africa, vol. 81(4), pages 538-560, December.
    2. Lota Dabio Tamini & Sorgho Zakaria, 2016. "Trade in environmental goods: how important are trade costs elasticities?," Cahiers de recherche CREATE 2016-3, CREATE.
    3. Pablo D. Fajgelbaum & Amit K. Khandelwal, 2016. "Measuring the Unequal Gains from Trade," The Quarterly Journal of Economics, Oxford University Press, vol. 131(3), pages 1113-1180.

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