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Deriving a Flexible Mixed Demand System: The Normalized Quadratic Model


  • GianCarlo Moschini
  • Pier Luigi Rizzi


This article deals with the specification of a locally flexible and theory-consistent system of mixed demand functions, a framework that allows for a rich set of possibilities about what is assumed as exogenous in a demand model. A coherent mixed demand system is derived by using the restricted expenditure function typically studied in the related area of rationed demands. The method is implemented by a new normalized quadratic (NQ) parameterization of the restricted expenditure function. The resulting NQ mixed demand system is illustrated with an application to a nine-good model of the Italian demand for vegetables. Copyright 2007, Oxford University Press.

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  • GianCarlo Moschini & Pier Luigi Rizzi, 2007. "Deriving a Flexible Mixed Demand System: The Normalized Quadratic Model," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(4), pages 1034-1045.
  • Handle: RePEc:oup:ajagec:v:89:y:2007:i:4:p:1034-1045

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    References listed on IDEAS

    1. Bo Honore & Ekaterini Kyriazidou & J. L. Powell, 2000. "Estimation of tobit-type models with individual specific effects," Econometric Reviews, Taylor & Francis Journals, vol. 19(3), pages 341-366.
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    4. Bell, Clive & Srinivasan, T N & Udry, Christopher, 1997. "Rationing, Spillover, and Interlinking in Credit Markets: The Case of Rural Punjab," Oxford Economic Papers, Oxford University Press, vol. 49(4), pages 557-585, October.
    5. Carter, Michael R., 1988. "Equilibrium credit rationing of small farm agriculture," Journal of Development Economics, Elsevier, vol. 28(1), pages 83-103, February.
    6. Barham, Bradford L. & Boucher, Stephen & Carter, Michael R., 1996. "Credit constraints, credit unions, and small-scale producers in Guatemala," World Development, Elsevier, vol. 24(5), pages 793-806, May.
    7. Gourieroux, Christian & Monfort, Alain, 1993. "Simulation-based inference : A survey with special reference to panel data models," Journal of Econometrics, Elsevier, vol. 59(1-2), pages 5-33, September.
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    Cited by:

    1. Färe, Rolf & Grosskopf, Shawna & Hayes, Kathy J. & Margaritis, Dimitris, 2008. "Estimating demand with distance functions: Parameterization in the primal and dual," Journal of Econometrics, Elsevier, vol. 147(2), pages 266-274, December.

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