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A trigonometric flexible consumer demand system

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  • Toshinobu Matsuda

Abstract

. This paper proposes the first ever empirical specification of a trigonometric demand system. The new model is potentially useful because of some attractive features. It is flexible, amenable to exact aggregation over consumers, possessed of trigonometric Engel curves, which can oscillate, and able to have an unusually large regular region. With comparisons between the new model and two other popular models, an illustration is given for Japanese demand for non‐durables and services. The new model shows relatively gentle Engel curves with an inflection point on each of them, which seem reasonable, given that aggregate expenditure is used in parameter estimation. JEL classification: C51, D12 Un système trigonométrique flexible de demande des consommateurs. Ce mémoire propose une première spécification empirique d’un système de demande trigonométrique. Le nouveau modèle est potentiellement utile à cause de certaines caractéristiques intéressantes. Il est flexible, se prête à l’agrégation exacte des consommateurs, donne lieu à des courbes d’Engels trigonométriques qui peuvent osciller et couvrir une région régulière singulièrement vaste. A partir de comparaisons entre le nouveau modèle et deux autres modèles populaires, on illustre ces avantages dans le cas de la demande japonaise pour les biens non durables et les services. Le nouveau modèle révèle des courbes d’Engels relativement douces avec un point d’inflexion en chacune d’elle, ce qui semble raisonnable compte tenu du fait que la dépense agrégée est utilisée dans la calibration des paramètres.

Suggested Citation

  • Toshinobu Matsuda, 2006. "A trigonometric flexible consumer demand system," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 39(1), pages 145-162, February.
  • Handle: RePEc:wly:canjec:v:39:y:2006:i:1:p:145-162
    DOI: 10.1111/j.0008-4085.2006.00342.x
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    1. Kamil Dybczak & Peter Tóth & David Voòka, 2014. "Effects of Price Shocks on Consumer Demand: Estimating the QUAIDS Demand System on Czech Household Budget Survey Data," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 64(6), pages 476-500, December.

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    More about this item

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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