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Estimation of household demand systems with theoretically compatible Engel curves and unit value specifications

  • Crawford, Ian
  • Laisney, Francois
  • Preston, Ian

We develop a method for estimation of price reactions using unit value data which exploits the implicit links between quantity and unit value choices. This allows us to combine appealing Engel curve specifications with a model of unit value determination in a way which is consistent with demand theory, unlike methods hitherto prominent in the literature. The method is applied to Czech data.

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Article provided by Elsevier in its journal Journal of Econometrics.

Volume (Year): 114 (2003)
Issue (Month): 2 (June)
Pages: 221-241

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Handle: RePEc:eee:econom:v:114:y:2003:i:2:p:221-241
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  8. Lahatte, Agénor & Miquel, Ruth & Laisney, François & Preston, Ian, 1997. "Demand Systems with Unit Values: A Comparsion of Two Specifications," ZEW Discussion Papers 97-24, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
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  19. Lewbel, Arthur, 1989. "Identification and Estimation of Equivalence Scales under Weak Separability," Review of Economic Studies, Wiley Blackwell, vol. 56(2), pages 311-16, April.
  20. Nichele, Veronique & Robin, Jean-Marc, 1995. "Simulation of indirect tax reforms using pooled micro and macro French data," Journal of Public Economics, Elsevier, vol. 56(2), pages 225-244, February.
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