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A Unified Approach to Incorporating Demographic or Other Effects into Demand Systems

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  • Arthur Lewbel

Abstract

A general method of introducing demographic effects into any demand system, using modifying functions, is described which permits complicated interactions of demographic variables with prices and expenditures. Theorems give properties the modifying functions must have to ensure integrability of the resulting system. Demand equations of the new system are given explicitly as functions of the original demand equations and the modifying functions. The procedure is interpreted as altering a household's technology, and is shown to encompass adult equivalent scales and related methods. Examples of modifying functions are derived and applications of the technique to uses other than demographic variation are considered.

Suggested Citation

  • Arthur Lewbel, 1985. "A Unified Approach to Incorporating Demographic or Other Effects into Demand Systems," Review of Economic Studies, Oxford University Press, vol. 52(1), pages 1-18.
  • Handle: RePEc:oup:restud:v:52:y:1985:i:1:p:1-18.
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    File URL: http://hdl.handle.net/10.2307/2297467
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