The matrix approach to evaluating demand equations
As there is a plethora of demand models, which one should be used to estimate income and price elasticities? The paper sheds light on this important practical problem by developing a matrix approach to simulating (MAS) demand equations to analyse their performance under idealized circumstances. Artificial data on the dependent variable are generated by one model, and these are then used for the estimation of another model. As an illustrative application, using four popular models, a 4 × 4 matrix is generated which gives all pair-wise comparisons. The performance of the models is then evaluated on the basis of the quality of the income and own-price elasticity estimates.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 33 (2001)
Issue (Month): 8 ()
|Contact details of provider:|| Web page: http://www.tandfonline.com/RAEC20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/RAEC20|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Howe, Howard & Pollak, Robert A & Wales, Terence J, 1979. "Theory and Time Series Estimation of the Quadratic Expenditure System," Econometrica, Econometric Society, vol. 47(5), pages 1231-47, September.
- William A. Barnett, 1979. "Theoretical Foundations for the Rotterdam Model," Review of Economic Studies, Oxford University Press, vol. 46(1), pages 109-130.
- K.W. Clements & S. Selvanathan, 1992.
"Understanding Consumption Patterns,"
Economics Discussion / Working Papers
92-13, The University of Western Australia, Department of Economics.
- Selvanathan, E. Antony, 1985.
"An even simpler differential demand system,"
Elsevier, vol. 19(4), pages 343-347.
- Christensen, Laurits R & Jorgenson, Dale W & Lau, Lawrence J, 1975. "Transcendental Logarithmic Utility Functions," American Economic Review, American Economic Association, vol. 65(3), pages 367-83, June.
- Theil, Henri & Shonkwiler, J. S. & Taylor, Timothy G., 1985. "A Monte Carlo test of Slutsky symmetry," Economics Letters, Elsevier, vol. 19(4), pages 331-332.
- Neves, Pedro Duarte, 1994. "A class of differential demand systems," Economics Letters, Elsevier, vol. 44(1-2), pages 83-86.
- Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-26, June.
- Keller, Wouter J., 1984. "Some simple but flexible differential consumer demand systems," Economics Letters, Elsevier, vol. 16(1-2), pages 77-82.
- André DECOSTER & Erik SHCOKKAERT, 1989. "Equity and efficiency of a reform of Belgian indirect taxes," Discussion Papers (REL - Recherches Economiques de Louvain) 1989023, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- Decoster, Andre & Schokkaert, Erik, 1990. "Tax reform results with different demand systems," Journal of Public Economics, Elsevier, vol. 41(3), pages 277-296, April.
- Byron, R. P., 1984. "On the flexibility of the Rotterdam model," European Economic Review, Elsevier, vol. 24(3), pages 273-283, April.
- Terence J. Wales, 1971. "A Generalized Linear Expenditure Model of the Demand for Non-durable Goods in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 4(4), pages 471-84, November.
- Ahmad, Ehtisham & Stern, Nicholas, 1984. "The theory of reform and indian indirect taxes," Journal of Public Economics, Elsevier, vol. 25(3), pages 259-298, December.
- de Boer, P. M. C. & Harkema, R., 1986. "Maximum likelihood estimation of sum-constrained linear models with insufficient observations," Economics Letters, Elsevier, vol. 20(4), pages 325-329.
- Madden, David, 1996. "Marginal Tax Reform and the Specification of Consumer Demand Systems," Oxford Economic Papers, Oxford University Press, vol. 48(4), pages 556-67, October.
- Selvanathan, Saroja, 1987. "A Monte Carlo test of preference independence," Economics Letters, Elsevier, vol. 25(3), pages 259-261.
- Taylor, Timothy G. & Shonkwiler, J. S. & Theil, Henri, 1986. "Monte Carlo and bootstrap testing of demand homogeneity," Economics Letters, Elsevier, vol. 20(1), pages 55-57.
- Diewert, W E, 1971. "An Application of the Shephard Duality Theorem: A Generalized Leontief Production Function," Journal of Political Economy, University of Chicago Press, vol. 79(3), pages 481-507, May-June.
When requesting a correction, please mention this item's handle: RePEc:taf:applec:v:33:y:2001:i:8:p:957-967. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty)
If references are entirely missing, you can add them using this form.