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The Almost Ideal and Translog Demand Systems

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  • Holt, Matthew T.
  • Goodwin, Barry K.

Abstract

This chapter reviews the specification and application of the Deaton and Muellbauer (1980) Almost Ideal Demand System (AIDS) and the Christensen, Jorgensen, and Lau (1975) tranlog (TL) demand system. In so doing we examine various refinements to these models, including ways of incorporating demographic effects, methods by which curvature conditions can be imposed, and issues associated with incorporating structural change and seasonal effects. We also review methods for adjusting for autocorrelation in the model's residuals. A set of empirical examples for the AIDS and a the log TL version of the translog based on historical meat price and consumption data for the United States are also presented.

Suggested Citation

  • Holt, Matthew T. & Goodwin, Barry K., 2009. "The Almost Ideal and Translog Demand Systems," MPRA Paper 15092, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:15092
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    File URL: https://mpra.ub.uni-muenchen.de/15092/1/MPRA_paper_15092.pdf
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    References listed on IDEAS

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    Cited by:

    1. Schmitz, Hendrik & Madlener, Reinhard, 2017. "Direct and Indirect Energy Rebound Effects in German Households: A Linearized Almost Ideal Demand System Approach," FCN Working Papers 10/2017, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    2. repec:spr:hecrev:v:2:y:2014:i:1:p:1-27 is not listed on IDEAS
    3. repec:spr:agfoec:v:2:y:2014:i:1:p:1-27 is not listed on IDEAS
    4. Bhat, Chandra R. & Castro, Marisol & Pinjari, Abdul Rawoof, 2015. "Allowing for complementarity and rich substitution patterns in multiple discrete–continuous models," Transportation Research Part B: Methodological, Elsevier, vol. 81(P1), pages 59-77.

    More about this item

    Keywords

    Almost ideal demand system; Autocorrelation; Curvature; Meat Demand; Translog;

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices

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