Latent separability: grouping goods without weak separability
This paper develops a new separability concept - latent separability. This is shown to provide a useful empirical and theoretical framework for investigating the grouping of goods and prices. It is a generalisation of weak separability in which groups are identified by specific exclusive goods but where other goods are allowed to enter more than one group. It is shown to be equivalent to weak separability in latent rather than purchased goods and provides a relationship between separability and household production theory. For the popular class of Linear, Almost Ideal and Translog demand models and their generalisations, the number of groups is shown to relate directly to an empirical rank condition. A detailed method for exploring the presence of latent separability is presented and applied to a long time series of household level consumption data for the UK.
|Date of creation:||01 Jan 1995|
|Date of revision:|
|Contact details of provider:|| Postal: The Institute for Fiscal Studies 7 Ridgmount Street LONDON WC1E 7AE|
Phone: (+44) 020 7291 4800
Fax: (+44) 020 7323 4780
Web page: http://www.ifs.org.uk
More information through EDIRC
|Order Information:|| Postal: The Institute for Fiscal Studies 7 Ridgmount Street LONDON WC1E 7AE|
When requesting a correction, please mention this item's handle: RePEc:ifs:ifsewp:95/09. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Emma Hyman)
If references are entirely missing, you can add them using this form.