IDEAS home Printed from https://ideas.repec.org/a/wly/soecon/v71y2005i3p607-619.html
   My bibliography  Save this article

Differential Demand Systems: A Further Look at Barten's Synthesis

Author

Listed:
  • Toshinobu Matsuda

Abstract

Barten's synthetic model is attractive to applied researchers since it is useful for testing the adequacy of the competing functional forms of differential demand systems including the popular Rotterdam and almost ideal demand systems. This article shows that the synthetic model is not a mere artificial composite of the known differential demand systems as it has been considered, but rather viewed as a model in its own right. It is demonstrated that, at the individual consumer level, Barten's model has the same marginal budget shares as generated by specific forms of Engel curves formulated by the Box‐Cox transformation.

Suggested Citation

  • Toshinobu Matsuda, 2005. "Differential Demand Systems: A Further Look at Barten's Synthesis," Southern Economic Journal, John Wiley & Sons, vol. 71(3), pages 607-619, January.
  • Handle: RePEc:wly:soecon:v:71:y:2005:i:3:p:607-619
    DOI: 10.1002/j.2325-8012.2005.tb00662.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/j.2325-8012.2005.tb00662.x
    Download Restriction: no

    File URL: https://libkey.io/10.1002/j.2325-8012.2005.tb00662.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Cheshire, Paul & Sheppard, Stephen, 2002. "The welfare economics of land use planning," Journal of Urban Economics, Elsevier, vol. 52(2), pages 242-269, September.
    2. Laitinen, Kenneth, 1978. "Why is demand homogeneity so often rejected?," Economics Letters, Elsevier, vol. 1(3), pages 187-191.
    3. Beach, Charles M & MacKinnon, James G, 1979. "Maximum Likelihood Estimation of Singular Equation Systems with Autoregressive Disturbances," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 20(2), pages 459-464, June.
    4. Eales, James S. & Unnevehr, Laurian J., 1994. "The inverse almost ideal demand system," European Economic Review, Elsevier, vol. 38(1), pages 101-115, January.
    5. Laitinen, Kenneth & Theil, Henri, 1979. "The Antonelli matrix and the reciprocal Slutsky matrix," Economics Letters, Elsevier, vol. 3(2), pages 153-157.
    6. Moschini, GianCarlo & Vissa, Anuradha, 1992. "A Linear Inverse Demand System," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 17(2), pages 1-9, December.
    7. BARTEN, Anton P., 1969. "Maximum likelihood estimation of a complete system of demand equations," LIDAM Reprints CORE 34, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    8. Barten, A. P., 1969. "Maximum likelihood estimation of a complete system of demand equations," European Economic Review, Elsevier, vol. 1(1), pages 7-73.
    9. James L. Seale & Mary A. Marchant & Alberto Basso, 2003. "Imports versus Domestic Production: A Demand System Analysis of the U.S. Red Wine Market," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 25(1), pages 187-202.
    10. Irwin, Douglas A., 2003. "The optimal tax on antebellum US cotton exports," Journal of International Economics, Elsevier, vol. 60(2), pages 275-291, August.
    11. Christensen, Laurits R & Jorgenson, Dale W & Lau, Lawrence J, 1975. "Transcendental Logarithmic Utility Functions," American Economic Review, American Economic Association, vol. 65(3), pages 367-383, June.
    12. Jonq-Ying Lee & Mark G. Brown & James L. Seale, 1994. "Model Choice in Consumer Analysis: Taiwan, 1970–89," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(3), pages 504-512.
    13. West, Sarah E. & Williams, R.C.Roberton III, 2004. "Estimates from a consumer demand system: implications for the incidence of environmental taxes," Journal of Environmental Economics and Management, Elsevier, vol. 47(3), pages 535-558, May.
    14. Véronique Nichèle & J.M. Robin, 1995. "Simulation of indirect tax reforms using pooled micro and macro French data [Evaluation des effets budgétaires et redistributifs de réformes de la fiscalité indirecte française]," Post-Print hal-02699381, HAL.
    15. Okamura, Minora, 1996. "The Welfare Effects of Disarmament on the United States under NATO and the Warsaw Pact," The Review of Economics and Statistics, MIT Press, vol. 78(2), pages 277-285, May.
    16. Barten, Anton P, 1993. "Consumer Allocation Models: Choice of Functional Form," Empirical Economics, Springer, vol. 18(1), pages 129-158.
    17. Keller, W.J. & Van Driel, J., 1985. "Differential consumer demand systems," European Economic Review, Elsevier, vol. 27(3), pages 375-390.
    18. Muellbauer, John, 1976. "Community Preferences and the Representative Consumer," Econometrica, Econometric Society, vol. 44(5), pages 979-999, September.
    19. Fleissig, Adrian & Swofford, James L., 1996. "A dynamic asymptotically ideal model of money demand," Journal of Monetary Economics, Elsevier, vol. 37(2-3), pages 371-380, April.
    20. Cockx, Bart & Brasseur, Carine, 2003. "The demand for physician services: Evidence from a natural experiment," Journal of Health Economics, Elsevier, vol. 22(6), pages 881-913, November.
    21. Meisner, James F., 1979. "The sad fate of the asymptotic Slutsky symmetry test for large systems," Economics Letters, Elsevier, vol. 2(3), pages 231-233.
    22. Robert J. Hill, 2000. "Constructing Bounds on Per Capita Income Differentials across Countries," Scandinavian Journal of Economics, Wiley Blackwell, vol. 102(2), pages 285-302, June.
    23. Nichele, Veronique & Robin, Jean-Marc, 1995. "Simulation of indirect tax reforms using pooled micro and macro French data," Journal of Public Economics, Elsevier, vol. 56(2), pages 225-244, February.
    24. Ana Maria Angulo & Jose Maria Gil & Boubaker Dhehibi & Jesus Mur, 2002. "Town size and the consumer behaviour of Spanish households: a panel data approach," Applied Economics, Taylor & Francis Journals, vol. 34(4), pages 503-507.
    25. Julian M. Alston & James A. Chalfant, 1993. "The Silence of the Lambdas: A Test of the Almost Ideal and Rotterdam Models," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 75(2), pages 304-313.
    26. Schmitz, Troy G. & Seale, James L., Jr., 2002. "Import Demand For Disaggregated Fresh Fruits In Japan," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 34(3), pages 1-18, December.
    27. Jon P. Nelson, 1999. "Broadcast Advertising and U.S. Demand for Alcoholic Beverages," Southern Economic Journal, John Wiley & Sons, vol. 65(4), pages 774-790, April.
    28. Lewbel, Arthur, 2003. "Calculating compensation in cases of wrongful death," Journal of Econometrics, Elsevier, vol. 113(1), pages 115-128, March.
    29. Martyn Duffy, 2001. "Advertising in consumer allocation models: choice of functional form," Applied Economics, Taylor & Francis Journals, vol. 33(4), pages 437-456.
    30. Barten, A. P. & Bettendorf, L. J., 1989. "Price formation of fish : An application of an inverse demand system," European Economic Review, Elsevier, vol. 33(8), pages 1509-1525, October.
    31. Capps Jr., Oral & Church, Jeffrey & Alan Love, H., 2003. "Specification issues and confidence intervals in unilateral price effects analysis," Journal of Econometrics, Elsevier, vol. 113(1), pages 3-31, March.
    32. Shelley A. Phipps, 1998. "What Is The Income "Cost Of A Child"? Exact Equivalence Scales For Canadian Two-Parent Families," The Review of Economics and Statistics, MIT Press, vol. 80(1), pages 157-164, February.
    33. Christopher J. Nicol, 1994. "Identifiability of Household Equivalence Scales through Exact Aggregation: Some Empirical Results," Canadian Journal of Economics, Canadian Economics Association, vol. 27(2), pages 307-328, May.
    34. William A. Barnett, 1979. "Theoretical Foundations for the Rotterdam Model," Review of Economic Studies, Oxford University Press, vol. 46(1), pages 109-130.
    35. Hayashi, Fumio, 1995. "Is the Japanese Extended Family Altruistically Linked? A Test Based on Engel Curves," Journal of Political Economy, University of Chicago Press, vol. 103(3), pages 661-674, June.
    36. Jon P. Nelson, 1999. "Broadcast Advertising and U.S. Demand for Alcoholic Beverages," Southern Economic Journal, John Wiley & Sons, vol. 65(4), pages 774-790, April.
    37. John D. Jackson, 1997. "Effects of Health Information and Generic Advertising on U.S. Meat Demand," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(1), pages 13-23.
    38. Véronique Nichèle & Jean-Marc Robin, 1995. "Simulation of indirect tax reforms using pooled micro and macro French data," Post-Print hal-03587618, HAL.
    39. Mountain, Dean C, 1988. "The Rotterdam Model: An Approximation in Variable Space," Econometrica, Econometric Society, vol. 56(2), pages 477-484, March.
    40. Berndt, Ernst R & Savin, N Eugene, 1975. "Estimation and Hypothesis Testing in Singular Equation Systems with Autoregressive Disturbances," Econometrica, Econometric Society, vol. 43(5-6), pages 937-957, Sept.-Nov.
    41. Brown, Mark G & Lee, Jonq-Ying & Seale, James L, Jr, 1995. "A Family of Inverse Demand Systems and Choice of Functional Form," Empirical Economics, Springer, vol. 20(3), pages 519-530.
    42. John Muellbauer, 1975. "Aggregation, Income Distribution and Consumer Demand," Review of Economic Studies, Oxford University Press, vol. 42(4), pages 525-543.
    43. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-326, June.
    44. Gary W. Brester & Ted C. Schroeder, 1995. "The Impacts of Brand and Generic Advertising on Meat Demand," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(4), pages 969-979.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Toshinobu Matsuda, 2007. "Linearizing the inverse quadratic almost ideal demand system," Applied Economics, Taylor & Francis Journals, vol. 39(3), pages 381-396.
    2. Holt, Matthew T., 2002. "Inverse demand systems and choice of functional form," European Economic Review, Elsevier, vol. 46(1), pages 117-142, January.
    3. Clements, Kenneth W. & Gao, Grace, 2015. "The Rotterdam demand model half a century on," Economic Modelling, Elsevier, vol. 49(C), pages 91-103.
    4. Kesavan, Thulasiram, 1988. "Monte Carlo experiments of market demand theory," ISU General Staff Papers 198801010800009854, Iowa State University, Department of Economics.
    5. Adrian R. Fleissig, 2016. "Changing Trends in U.S. Alcohol Demand," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 44(3), pages 263-276, September.
    6. Fengxia Dong & Frank Fuller, 2010. "Dietary Structural Change in China's Cities: Empirical Fact or Urban Legend?," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 58(1), pages 73-91, March.
    7. Barnett, William A. & Serletis, Apostolos, 2008. "Consumer preferences and demand systems," Journal of Econometrics, Elsevier, vol. 147(2), pages 210-224, December.
    8. Yeboah, Godfred & Maynard, Leigh J., 2004. "The Impact Of Bse, Fmd, And U.S. Export Promotion Expenditures On Japanese Meat Demand," 2004 Annual meeting, August 1-4, Denver, CO 19978, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    9. William A. Barnett & Isaac Kalonda Kanyama, 2013. "Time-varying parameters in the almost ideal demand system and the Rotterdam model: will the best specification please stand up?," Applied Economics, Taylor & Francis Journals, vol. 45(29), pages 4169-4183, October.
    10. Okrent, Abigail M. & Alston, Julian M., 2011. "Demand for Food in the United States: A Review of Literature, Evaluation of Previous Estimates, and Presentation of New Estimates of Demand," Monographs, University of California, Davis, Giannini Foundation, number 251908, December.
    11. Fousekis, Panos & Revell, Brian J., 2002. "Primary Demand for Red Meats in the United Kingdom," Cahiers d'Economie et de Sociologie Rurales (CESR), Institut National de la Recherche Agronomique (INRA), vol. 63.
    12. Barnett, William A. & Serletis, Apostolos, 2008. "Measuring Consumer Preferences and Estimating Demand Systems," MPRA Paper 12318, University Library of Munich, Germany.
    13. Sarker, Dr. Rakhal & Koto, Prosper & Cassidy, Heather, 2015. "A Demand System for Major Dairy Products in Ontario," 2015 Conference, August 9-14, 2015, Milan, Italy 212689, International Association of Agricultural Economists.
    14. William A. Barnett & Isaac Kalonda Kanyama, 2013. "Time-varying parameters in the almost ideal demand system and the Rotterdam model: will the best specification please stand up?," Applied Economics, Taylor & Francis Journals, vol. 45(29), pages 4169-4183, October.
    15. Rodrigo García Arancibia & Edith Depetris Guiguet, 2020. "Brazilian Import Demand of Dairy Products with Emphasis in the Mercosul Context [Demanda brasileira de importações de laticínios com ênfase no contexo do Mercosul]," Nova Economia, Economics Department, Universidade Federal de Minas Gerais (Brazil), vol. 30(2), pages 551-577, May-Augus.
    16. Eric Sjöberg, 2015. "Pricing on the Fish Market--Does Size Matter?," Marine Resource Economics, University of Chicago Press, vol. 30(3), pages 277-296.
    17. van Heeswijk, B J & de Boer, P M C & Harkema, R, 1993. "A Dynamic Specification of an AIDS Import Allocation Model," Empirical Economics, Springer, vol. 18(1), pages 57-73.
    18. William Barnett & Ousmane Seck, 2006. "Rotterdam vs Almost Ideal Models: Will the Best Demand Specification Please Stand Up?," WORKING PAPERS SERIES IN THEORETICAL AND APPLIED ECONOMICS 200605, University of Kansas, Department of Economics.
    19. Yadavalli, Anita & Jones, Keithly, 2014. "Does media influence consumer demand? The case of lean finely textured beef in the United States," Food Policy, Elsevier, vol. 49(P1), pages 219-227.
    20. Kenneth W. Clements & E. A. Selvanathan & Saroja Selvanathan, 1992. "Henri Theil’s Contributions to Demand Analysis," Palgrave Macmillan Books, in: Ronald Bewley & Tran Hoa (ed.), Contributions to Consumer Demand and Econometrics, chapter 5, pages 74-104, Palgrave Macmillan.

    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:wly:soecon:v:71:y:2005:i:3:p:607-619. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1002/(ISSN)2325-8012 .

    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.