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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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    References listed on IDEAS

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    More about this item

    Keywords

    Almost ideal demand system; Autocorrelation; Curvature; Meat Demand; Translog;
    All these keywords.

    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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