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Semiparametric Estimation of Consumer Demand Systems with Micro Data

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  • Abdoul G. Sam
  • Yi Zheng

Abstract

Maximum likelihood and two-step estimators of censored demand systems yield biased and inconsistent parameter estimates when the assumed joint distribution of disturbances is incorrect. This paper proposes a semiparametric estimator that retains the computational advantage of the two-step approach but is immune to distributional misspecification. The key difference between the proposed estimator and the two-step estimator is that the parameters of the binary censoring equations are estimated using a distribution-free single-index model. We implement the proposed estimator using household-level data obtained from the Hainan province in China. specification test lends support to our approach. Copyright 2010, Oxford University Press.

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  • Abdoul G. Sam & Yi Zheng, 2010. "Semiparametric Estimation of Consumer Demand Systems with Micro Data," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 92(1), pages 246-257.
    • Handle: RePEc:oup:ajagec:v:92:y:2010:i:1:p:246-257
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    File URL: http://hdl.handle.net/10.1093/ajae/aap014
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    Citations

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    Cited by:

    1. Femenia, Fabienne, 2019. "A Meta-Analysis of the Price and Income Elasticities of Food Demand," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 68(2), June.
    2. Abdoul G. Sam & Babatunde O. Abidoye & Sihle Mashaba, 2021. "Climate change and household welfare in sub-Saharan Africa: empirical evidence from Swaziland," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 13(2), pages 439-455, April.
    3. Davis, Christopher G. & Blayney, Donald P. & Dong, Diansheng & Yen, Steven T. & Johnson, Rachel J., 2011. "Will Changing Demographics Affect U.S. Cheese Demand?," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 43(2), pages 1-15, May.
    4. Honda, Arisa & Nakajima, Shinsaku & Ohura, Yuji & Kikushima, Ryosuke & Kono, Yoshinobu, 2015. "Household Salads Consumption in Japan: An Application of the two-step Demand System," 2015 Conference, August 9-14, 2015, Milan, Italy 211739, International Association of Agricultural Economists.
    5. Davis, Christopher G. & Dong, Diansheng & Blayney, Donald P. & Yen, Steven T. & Stillman, Richard, 2012. "U.S. Fluid Milk Demand: A Disaggregated Approach," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 15(1), pages 1-26, February.
    6. Arthur Lewbel & Lars Nesheim, 2019. "Sparse demand systems: corners and complements," Boston College Working Papers in Economics 1005, Boston College Department of Economics.
    7. Davis, Christopher G. & Dong, Diansheng & Blayney, Donald P. & Owens, Ashley, 2010. "An Analysis of U.S. Household Dairy Demand," Technical Bulletins 184308, United States Department of Agriculture, Economic Research Service.
    8. Bilgic, Abdulbaki & Yen, Steven T., 2013. "Household food demand in Turkey: A two-step demand system approach," Food Policy, Elsevier, vol. 43(C), pages 267-277.
    9. Gracious M. Diiro & Abdoul G. Sam & David Kraybill, 2017. "Heterogeneous Effects of Maternal Labor Market Participation on the Nutritional Status of Children: Empirical Evidence from Rural India," Child Indicators Research, Springer;The International Society of Child Indicators (ISCI), vol. 10(3), pages 609-632, September.
    10. Keith R. McLaren & Ou Yang, 2014. "A Class of Demand Systems Satisfying Global Regularity and Having Complete Rank Flexibility," Monash Econometrics and Business Statistics Working Papers 6/14, Monash University, Department of Econometrics and Business Statistics.
    11. Dharmasena, Senarath & Capps, Oral Jr, 2017. "Consumer Demand for Nut Products in the United States: Application of Semi-parametric Estimation of Censored Quadratic Almost Ideal Demand System (C-QUAIDS) with Household-Level Micro Data," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252682, Southern Agricultural Economics Association.
    12. Shuying Shen & Abdoul G. Sam & Eugene Jones, 2014. "Credit Card Indebtedness and Psychological Well-Being Over Time: Empirical Evidence from a Household Survey," Journal of Consumer Affairs, Wiley Blackwell, vol. 48(3), pages 431-456, October.
    13. Dharmasena, Senarath & Okrent, Abigail & Capps, Oral, Jr., 2014. "Consumer Demand for Greek-Style Yogurt and its Implications to the Dairy Industry in the United States," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 169799, Agricultural and Applied Economics Association.
    14. Jing Cao, Mun S. Ho, and Huifang Liang, 2016. "Household energy demand in Urban China: Accounting for regional prices and rapid income change," The Energy Journal, International Association for Energy Economics, vol. 0(China Spe).
    15. Vardges Hovhannisyan & Hayk Khachatryan, 2017. "Ornamental Plants in the United States: An Econometric Analysis of a Household‐Level Demand System," Agribusiness, John Wiley & Sons, Ltd., vol. 33(2), pages 226-241, April.
    16. Sam, Abdoul G. & Abidoye, Babatunde & Mashaba, Sihle, 2021. "Climate change and household welfare in Sub-Saharan Africa: empirical evidence from Swaziland," LSE Research Online Documents on Economics 106700, London School of Economics and Political Science, LSE Library.
    17. Kristin Göbel, 2013. "Remittances, expenditure patterns, and gender: parametric and semiparametric evidence from Ecuador," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-19, December.

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