IDEAS home Printed from https://ideas.repec.org/a/tpr/restat/v78y1996i4p718-25.html
   My bibliography  Save this article

Demand Estimation with Expenditure Measurement Errors on the Left and Right Hand Side

Author

Listed:
  • Lewbel, Arthur

Abstract

Let x be total consumption expenditures. Measurement errors in consumer budget allocation models cause unusual problems because errors in the dependent variables, consumption on individual goods, contribute to errors in the regressor x. Empirically adequate budget share models, like the AIDS, translog, and quadratic AIDS, are linear or quadratic in log x. It is shown that, for these specifications, two stage least squares fails to correct for the measurement error. A simple technique for recovering consistent estimates from two stage least squares is provided, along with an efficient generalized method of moments estimator. The method is applied to U.K. fuel demand data. Copyright 1996 by MIT Press.

Suggested Citation

  • Lewbel, Arthur, 1996. "Demand Estimation with Expenditure Measurement Errors on the Left and Right Hand Side," The Review of Economics and Statistics, MIT Press, vol. 78(4), pages 718-725, November.
    • Handle: RePEc:tpr:restat:v:78:y:1996:i:4:p:718-25
    as

    Download full text from publisher

    File URL: http://links.jstor.org/sici?sici=0034-6535%28199611%2978%3A4%3C718%3ADEWEME%3E2.0.CO%3B2-7&origin=bc
    File Function: full text
    Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yingyao Hu & Zhongjian Lin, 2018. "Misclassification and the hidden silent rivalry," CeMMAP working papers CWP12/18, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
    2. Paul A. Bekker & Jan van der Ploeg, 2000. "Instrumental Variable Estimation Based on Grouped Data," Econometric Society World Congress 2000 Contributed Papers 1862, Econometric Society.
    3. Thomas F. Crossley & Hamish W. Low, 2011. "Is The Elasticity Of Intertemporal Substitution Constant?," Journal of the European Economic Association, European Economic Association, vol. 9(1), pages 87-105, February.
    4. Orazio Attanasio & Erich Battistin & Alice Mesnard, 2012. "Food and Cash Transfers: Evidence from Colombia," Economic Journal, Royal Economic Society, vol. 122(559), pages 92-124, March.
    5. Böhme, Marcus & Thiele, Rainer, 2012. "Is the Informal Sector Constrained from the Demand Side? Evidence for Six West African Capitals," World Development, Elsevier, vol. 40(7), pages 1369-1381.
    6. Song, Suyong, 2015. "Semiparametric estimation of models with conditional moment restrictions in the presence of nonclassical measurement errors," Journal of Econometrics, Elsevier, vol. 185(1), pages 95-109.
    7. Qing Li, 2014. "Identifiability of mean-reverting measurement error with instrumental variable," Statistica Neerlandica, Netherlands Society for Statistics and Operations Research, vol. 68(2), pages 118-129, May.
    8. Clare Kelly & Gauthier Lanot, 2002. "Consumption Patterns over Pay Periods," Microeconomics 0211013, University Library of Munich, Germany.
    9. Thomas F. Crossley & Hamish W. Low, 2005. "Unexploited Connections Between Intra- and Inter-temporal Allocation," Quantitative Studies in Economics and Population Research Reports 395, McMaster University.
    10. Chen Zhen & Justin L. Taylor & Mary K. Muth & Ephraim Leibtag, 2009. "Understanding Differences in Self-Reported Expenditures between Household Scanner Data and Diary Survey Data: A Comparison of Homescan and Consumer Expenditure Survey," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 31(3), pages 470-492.
    11. De Nadai, Michele & Lewbel, Arthur, 2016. "Nonparametric errors in variables models with measurement errors on both sides of the equation," Journal of Econometrics, Elsevier, vol. 191(1), pages 19-32.
    12. Ubfal, Diego, 2016. "How general are time preferences? Eliciting good-specific discount rates," Journal of Development Economics, Elsevier, vol. 118(C), pages 150-170.
    13. Erich Battistin, 2002. "Errors in Survey Reports of Consumption Expenditures," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 C4-2, International Conferences on Panel Data.
    14. Brannlund, Runar & Nordstrom, Jonas, 2004. "Carbon tax simulations using a household demand model," European Economic Review, Elsevier, vol. 48(1), pages 211-233, February.
    15. Meijer, Erik & Spierdijk, Laura & Wansbeek, Tom, 2017. "Consistent estimation of linear panel data models with measurement error," Journal of Econometrics, Elsevier, vol. 200(2), pages 169-180.
    16. Stoker, Thomas M. & Berndt, Ernst R. & Denny Ellerman, A. & Schennach, Susanne M., 2005. "Panel data analysis of U.S. coal productivity," Journal of Econometrics, Elsevier, vol. 127(2), pages 131-164, August.
    17. Kohtaro Hitomi & Masamune Iwasawa & Yoshihiko Nishiyama, 2018. "Rate Optimal Specification Test When the Number of Instruments is Large," KIER Working Papers 986, Kyoto University, Institute of Economic Research.
    18. Brännlund, Runar & Nordström, Jonas, 2001. "Modelling Consumer Demand and Household Labour Supply: Welfare Effects of Increasing Carbon Taxes," Umeå Economic Studies 571, Umeå University, Department of Economics.
    19. W D A Bryant, 2009. "General Equilibrium:Theory and Evidence," World Scientific Books, World Scientific Publishing Co. Pte. Ltd., number 6875, August.
    20. Li, Tong, 2002. "Robust and consistent estimation of nonlinear errors-in-variables models," Journal of Econometrics, Elsevier, vol. 110(1), pages 1-26, September.
    21. Erling Røed Larsen, 2002. "Estimating Latent Total Consumption in a Household," Discussion Papers 324, Statistics Norway, Research Department.
    22. Paul Oslington, 2012. "General Equilibrium: Theory and Evidence," The Economic Record, The Economic Society of Australia, vol. 88(282), pages 446-448, September.
    23. Daniel Miles & Andrés Pereyra & Máximo Rossi, 2000. "Income Elasticity of Environmental Amenities," Documentos de Trabajo (working papers) 0200, Department of Economics - dECON.
    24. Lyssiotou, Panayiota & Pashardes, Panos & Stengos, Thanasis, 1999. "Testing the rank of Engel curves with endogenous expenditure," Economics Letters, Elsevier, vol. 64(1), pages 61-65, July.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tpr:restat:v:78:y:1996:i:4:p:718-25. 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: (Ann Olson). General contact details of provider: https://www.mitpressjournals.org/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.