Demands for Food Products Across the Development Spectrum: Application of a Rank Four Demand System
A rational rank four AIDS model (RAIDS) is used to estimate consumer demands for final goods and services in countries spanning the development spectrum. RAIDS is used as it provides more general price and expenditure responses. It also nests the Quadratic and non-liner AIDS models. RAIDS is estimated using the entire sample and sub-samples based on the country's level of per capita expenditure. Results indicate selection of nested functional form differs by sub-sample. AIDS is selected for the low per capita expenditure countries, sample is considered. Differences in parameter estimates manifest themselves in price and Engel elasticities. Such differences warrant caution when using global demand systems to undertake policy analysis.
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