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Estimation of household demand systems with theoretically compatible Engel curves and unit value specifications

Author

Listed:
  • Ian Crawford

    (Institute for Fiscal Studies and Nuffield College, Oxford)

  • Francois Laisney

    (Institute for Fiscal Studies and ZEW, Mannheim)

  • Ian Preston

    (Institute for Fiscal Studies and University College London)

Abstract

We develop a method for estimation of price reactions using unit value data which exploits the implicit links between quantity and unit value choices. This allows us to combine appealing Engel curve specifications with a model of unit value determination in a way which is consistent with demand theory, unlike methods hitherto prominent in the literature. The method is applied to Czech data.

Suggested Citation

  • Ian Crawford & Francois Laisney & Ian Preston, 2002. "Estimation of household demand systems with theoretically compatible Engel curves and unit value specifications," IFS Working Papers W02/17, Institute for Fiscal Studies.
  • Handle: RePEc:ifs:ifsewp:02/17
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    References listed on IDEAS

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    More about this item

    Keywords

    Consumer demand; unit values;

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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