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Flexible Multistage Demand System Based on Indirect Separability, A

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  • Moschini, GianCarlo

Abstract

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.

Suggested Citation

  • Moschini, GianCarlo, 2001. "Flexible Multistage Demand System Based on Indirect Separability, A," Staff General Research Papers Archive 1921, Iowa State University, Department of Economics.
  • Handle: RePEc:isu:genres:1921
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    Cited by:

    1. Maria Erlinda M. Mutuc & Suwen Pan & Roderick M. Rejesus, 2007. "Household vegetable demand in the Philippines: Is there an urban-rural divide?," Agribusiness, John Wiley & Sons, Ltd., vol. 23(4), pages 511-527.
    2. Per Hjertstrand & James Swofford, 2012. "Revealed preference tests for consistency with weakly separable indirect utility," Theory and Decision, Springer, vol. 72(2), pages 245-256, February.
    3. Bergtold, Jason S. & Akobundu, Eberechukwu & Peterson, Everett B., 2004. "The FAST Method: Estimating Unconditional Demand Elasticities for Processed Foods in the Presence of Fixed Effects," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 29(02), August.
    4. 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.
    5. John C. Beghin & Jean-Christophe Bureau & Sophie Drogué, 2003. "The Calibration of Incomplete Demand Systems in Quantitative Analysis," Working Papers 2003/01, INRA, Economie Publique.
    6. Bergtold, Jason S. & Peterson, Everett B., 2005. "Introducing Asymmetric Separability in the FAST Multistage Demand System," 2005 Annual meeting, July 24-27, Providence, RI 19497, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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