Regular and Estimable Inverse Demand Systems: A Distance Function Approach
To be useful for realistic policy simulation in an environment of rapid structural change, inverse demand systems must remain regular over substantial variations in quantities. The distance function is a convenient vehicle for generating such systems. While it directly yields Hicksian inverse demand functions, those functions will not usually have an explicit representation in terms of the observable variables. Note however that this problem need not hinder estimation and could be solved by using the numerical inversion estimation approach. This paper develops the formal theory for using distance functions in this context, and demonstrates the operational feasibility of the method.
|Date of creation:||Jul 2002|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.buseco.monash.edu.au/depts/ebs/
More information through EDIRC
|Order Information:|| Web: http://www.buseco.monash.edu.au/depts/ebs/pubs/wpapers/ Email: |
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Barten, A. P. & Bettendorf, L. J., 1989. "Price formation of fish : An application of an inverse demand system," European Economic Review, Elsevier, vol. 33(8), pages 1509-1525, October.
- Richard Blundell & Jean-Marc Robin, 2000.
"Latent Separability: Grouping Goods without Weak Separability,"
Econometric Society, vol. 68(1), pages 53-84, January.
- R. Blundell & Jean-Marc Robin, 2000. "Latent separability: grouping goods without weak separability," Sciences Po publications info:hdl:2441/f0uohitsgqh, Sciences Po.
- Richard Blundell & Robin, J M, 1995. "Latent separability: grouping goods without weak separability," IFS Working Papers W95/09, Institute for Fiscal Studies.
- Richard Blundell & Jean-Marc Robin, 2000. "Latent Separability: Grouping Goods without Weak Separability," Post-Print hal-00357752, HAL.
- Perroni, Carlo & Rutherford, Thomas F., 1995.
"Regular flexibility of nested CES functions,"
European Economic Review,
Elsevier, vol. 39(2), pages 335-343, February.
- Pollak, R.A. & Wales, T.J., 1990.
"The Likelihood Dominance Criterion: A New Approach To Model Selection,"
90-10, University of Washington, Department of Economics.
- Pollak, Robert A. & Wales, Terence J., 1991. "The likelihood dominance criterion : A new approach to model selection," Journal of Econometrics, Elsevier, vol. 47(2-3), pages 227-242, February.
- Pollak, R.A. & Wales, T.J., 1990. "The Likelihood Dominance Criterion: A New Approach To Model Selection," Discussion Papers in Economics at the University of Washington 90-10, Department of Economics at the University of Washington.
- Holt, Matthew T., 2002. "Inverse demand systems and choice of functional form," European Economic Review, Elsevier, vol. 46(1), pages 117-142, January.
- Beach, Charles M & MacKinnon, James G, 1979.
"Maximum Likelihood Estimation of Singular Equation Systems with Autoregressive Disturbances,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 20(2), pages 459-64, June.
- Charles M. Beach & James G. MacKinnon, 1977. "Maximum Likelihood Estimation of Singular Equation Systems with Autoregressive Disturbances," Working Papers 276, Queen's University, Department of Economics.
- Blackorby, Charles & Davidson, Russell & Schworm, William, 1991.
"Implicit separability: Characterisation and implications for consumer demands,"
Journal of Economic Theory,
Elsevier, vol. 55(2), pages 364-399, December.
- Blackorby, C. & Davidson, R. & Schworm, W., 1990. "Implicit Separability: Characterisation And Implications For Consumer Demands," G.R.E.Q.A.M. 90a16, Universite Aix-Marseille III.
- James Eales & Catherine Durham & Cathy R. Wessells, 1997. "Generalized Models of Japanese Demand for Fish," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(4), pages 1153-1163.
- Richard C. Bishop & Matthew T. Holt, 2002. "A semiflexible normalized quadratic inverse demand system: an application to the price formation of fish," Empirical Economics, Springer, vol. 27(1), pages 23-47.
- Selvanathan, Saroja, 1991. "The Reliability of ML Estimators of Systems of Demand Equations: Evidence from OECD Countries," The Review of Economics and Statistics, MIT Press, vol. 73(2), pages 346-53, May.
- Brown, Mark G & Lee, Jonq-Ying & Seale, James L, Jr, 1995. "A Family of Inverse Demand Systems and Choice of Functional Form," Empirical Economics, Springer, vol. 20(3), pages 519-30.
- Eales, James S. & Unnevehr, Laurian J., 1994. "The inverse almost ideal demand system," European Economic Review, Elsevier, vol. 38(1), pages 101-115, January.
- Cooper, Russel J. & McLaren, Keith R. & Wong, Gary K. K., 2001. "On the empirical exploitation of consumers' profit functions in static analyses," Economics Letters, Elsevier, vol. 72(2), pages 181-187, August.
- Beach, Robert H. & Holt, Matthew T., 1999.
"Incorporating Quadratic Scale Curves In Inverse Demand Systems,"
1999 Annual meeting, August 8-11, Nashville, TN
21579, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Robert H. Beach & Matthew T. Holt, 2001. "Incorporating Quadratic Scale Curves in Inverse Demand Systems," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(1), pages 230-245.
When requesting a correction, please mention this item's handle: RePEc:msh:ebswps:2002-6. 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: (Simone Grose)
If references are entirely missing, you can add them using this form.