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Flexible Multistage Demand System Based on Indirect Separability, A

  • Moschini, GianCarlo

The notion of indirect separability is exploited to derive a new multistage demand system. The model allows a consistent parameterization of demand relations at various budgeting stages and it fulfills the requirement of flexibility while satisfying separability globally. Two propositions are derived to characterize flexible and separable functional forms, which lead to the specification of a flexible and separable translog (FAST) demand system. The model is particularly attractive for modeling large complete demand systems and is illustrated with an application to Canadian food demand.

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File URL: http://www.econ.iastate.edu/sites/default/files/publications/papers/paper_1921.pdf
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Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 1921.

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Date of creation: 01 Jan 2001
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Publication status: Published in Southern Economic Journal 2001, vol. 68, pp. 22-41
Handle: RePEc:isu:genres:1921
Contact details of provider: Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
Fax: +1 515.294.0221
Web page: http://www.econ.iastate.edu
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  21. Moschini, GianCarlo, 1998. "Semiflexible Almost Ideal Demand System, The," Staff General Research Papers 1193, Iowa State University, Department of Economics.
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  35. Moschini, GianCarlo & Moro, D. & Green, Richard D., 1994. "Maintaining and Testing Separability in Demand Systems," Staff General Research Papers 11247, Iowa State University, Department of Economics.
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