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The Differential Approach to Demand Analysis and the Rotterdam Model

Author

Listed:
  • William Barnett

    (Department of Economics, The University of Kansas)

  • Apostolos Serletis

    (Department of Economics, University of Calgary)

Abstract

This paper presents the differential approach to applied demand analysis. The demand systems of this approach are general, having coefficients which are not neces- sarily constant. We consider the Rotterdam parameterization of differential demand systems and derive the absolute and relative price versions of the Rotterdam model, due to Theil (1965) and Barten (1966). We address estimation issues and point out that, unlike most parametric and semi-nonparametric demand systems, the Rotterdam model is econometrically regular.

Suggested Citation

  • William Barnett & Apostolos Serletis, 2009. "The Differential Approach to Demand Analysis and the Rotterdam Model," WORKING PAPERS SERIES IN THEORETICAL AND APPLIED ECONOMICS 200902, University of Kansas, Department of Economics, revised Jan 2009.
    • Handle: RePEc:kan:wpaper:200902
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    File URL: http://www2.ku.edu/~kuwpaper/2009Papers/200902.pdf
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    References listed on IDEAS

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    8. BARTEN, Anton P., 1967. "Evidence on the Slutsky conditions for demand equations," LIDAM Reprints CORE 8, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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    13. Diewert, W E & Wales, T J, 1988. "Normalized Quadratic Systems of Consumer Demand Functions," Journal of Business & Economic Statistics, American Statistical Association, vol. 6(3), pages 303-312, July.
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    18. William A. Barnett & Ousmane Seck, 2008. "Rotterdam model versus almost ideal demand system: will the best specification please stand up?," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 23(6), pages 795-824.
    19. R. P. Byron, 1970. "A Simple Method for Estimating Demand Systems under Separable Utility Assumptions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 37(2), pages 261-274.
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    Cited by:

    1. Clements, Kenneth W. & Gao, Grace, 2015. "The Rotterdam demand model half a century on," Economic Modelling, Elsevier, vol. 49(C), pages 91-103.
    2. Lorenzo Sabatelli, 2016. "Relationship between the Uncompensated Price Elasticity and the Income Elasticity of Demand under Conditions of Additive Preferences," PLOS ONE, Public Library of Science, vol. 11(3), pages 1-11, March.
    3. Ignacio, Escañuela Romana, 2019. "The elasticities of passenger transport demand in the Northeast Corridor," Research in Transportation Economics, Elsevier, vol. 78(C).
    4. Barnett, William A. & Serletis, Apostolos, 2008. "Measuring Consumer Preferences and Estimating Demand Systems," MPRA Paper 12318, University Library of Munich, Germany.
    5. Sun, Changyou, 2014. "Recent growth in China's roundwood import and its global implications," Forest Policy and Economics, Elsevier, vol. 39(C), pages 43-53.

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    More about this item

    Keywords

    Diffrential demand systems; Theoretical regularity; Econometric regularity.;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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