IDEAS home Printed from https://ideas.repec.org/a/tpr/restat/v92y2010i3p549-556.html
   My bibliography  Save this article

Shape-Invariant Demand Functions

Author

Listed:
  • Arthur Lewbel

    (Boston College)

Abstract

Shape invariance is a property of demand functions that is widely used for parametric and semiparametric modeling and is associated with a commonly employed class of equivalence scale models used for welfare calculations. This paper derives the set of all shape-invariant demand functions and associated preferences. All previously known shape-invariant demands were derived from utility functions that, up to monotonic transformation, are called IB/ESE (independent of base-equivalence scale exact) utility functions, because they yield IB/ESE equivalence scales. This paper shows that there exist exceptional shape-invariant demands that are not derived from a transform of IB/ESE utility and provides some simple tests for these exceptions. In particular, all the exceptions have rank 2, so any rank 3 or higher demand system is shape invariant if and only if it is derived from a transform of IB/ESE utility. © 2010 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Suggested Citation

  • Arthur Lewbel, 2010. "Shape-Invariant Demand Functions," The Review of Economics and Statistics, MIT Press, vol. 92(3), pages 549-556, August.
    • Handle: RePEc:tpr:restat:v:92:y:2010:i:3:p:549-556
    as

    Download full text from publisher

    File URL: http://www.mitpressjournals.org/doi/pdf/10.1162/REST_a_00010
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

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

    Other versions of this item:

    Citations

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


    Cited by:

    1. Wu, Ximing & Sickles, Robin, 2018. "Semiparametric estimation under shape constraints," Econometrics and Statistics, Elsevier, vol. 6(C), pages 74-89.
    2. Kesternich, Iris & Siflinger, Bettina M. & Smith, James P. & Winter, Joachim, 2013. "Individual Behavior as a Pathway between Early-Life Shocks and Adult Health: Evidence from Hunger Episodes in Post-War Germany," IZA Discussion Papers 7713, Institute of Labor Economics (IZA).
    3. Ligon, Ethan, 2023. "Risk sharing tests and covariate shocks," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt2zr503fq, Department of Agricultural & Resource Economics, UC Berkeley.
    4. 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.
    5. Bargain, Olivier & Lacroix, Guy & Tiberti, Luca, 2021. "Intrahousehold Resource Allocation and Individual Poverty: Assessing Collective Model Predictions against Direct Evidence on Sharing," IZA Discussion Papers 14406, Institute of Labor Economics (IZA).
    6. Olivier Bargain, 2022. "Income Sources, Intra-Household Allocation And Individual Poverty," Commitment to Equity (CEQ) Working Paper Series 121, Tulane University, Department of Economics.
    7. Christian Dudel & Jan Marvin Garbuszus & Julian Schmied, 2021. "Assessing differences in household needs: a comparison of approaches for the estimation of equivalence scales using German expenditure data," Empirical Economics, Springer, vol. 60(4), pages 1629-1659, April.
    8. Thibault Fally, 2018. "Integrability and Generalized Separability," NBER Working Papers 25025, National Bureau of Economic Research, Inc.
    9. Ulugbek Aminjonov & Olivier Bargain & Maira Colacce & Luca Tiberti, 2022. "Culture, Intra-household Distribution and Individual Poverty," Working Papers - Economics wp2022_21.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    10. Brown, Caitlin & Calvi, Rossella & Penglase, Jacob, 2021. "Sharing the pie: An analysis of undernutrition and individual consumption in Bangladesh," Journal of Public Economics, Elsevier, vol. 200(C).
    11. Lyssiotou, Panayiota, 2012. "Demographics and demand: Evaluation of alternative functional forms," Economics Letters, Elsevier, vol. 117(3), pages 627-631.
    12. Syed Abul Hasan, 2016. "Engel curves and equivalence scales for Bangladesh," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 21(2), pages 301-315, April.

    More about this item

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation

    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:92:y:2010:i:3:p:549-556. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kelly McDougall (email available below). General contact details of provider: https://direct.mit.edu/journals .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.