Engel Curves Specification in an Artificial Model of Consumption Dynamics with Socially Evolving Preferences
In studying individual consumption behavior, an important issue is the analysis of the relation between commodity expenditure and income (or total expenditure). In this paper we firstly review the more recent theoretical and empirical literature attempting to: (i) derive theory-consistent demand systems models which are able to account for empirically observed non-linearities in total expenditure; (ii) find out whether there exist necessary and sufficient conditions on the across-households distributions such that empirically obtained demand functions still preserve a strong consistency between micro and macro parameters (e.g. consumption-income elasticities). We then apply the techniques discussed in the first part of the paper to the data generated by a computer-simulated model of consumption dynamics presented in Aversi et al. (1999). We find that the model, under a large range of parametrizations, is pretty well equipped to replicate most of the stylized facts displayed by empirically observed consumption patterns, both cross-section and across time.
|Date of creation:||27 Dec 2001|
|Date of revision:|
|Contact details of provider:|| Postal: Piazza dei Martiri della Liberta, 33, 56127 Pisa|
Web page: http://www.lem.sssup.it/
More information through EDIRC
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.:
- HÄRDLE, Wolfgang & JERISON, Michael, .
"Cross section Engel curves over time,"
CORE Discussion Papers RP
991, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Hardle, W. & Jerison, M., 1990. "Cross section Engel curves over time," CORE Discussion Papers 1990016, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Wolfgang HÄRDLE & Michael JERISON, 1991. "Cross section Engel Curves over Time," Discussion Papers (REL - Recherches Economiques de Louvain) 1991045, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- Haerdle,Wolfgang Jerison,Michael, 1988. "Cross section Engel curves over time," Discussion Paper Serie A 160, University of Bonn, Germany.
- Hausman, J. A. & Newey, W. K. & Powell, J. L., 1995.
"Nonlinear errors in variables Estimation of some Engel curves,"
Journal of Econometrics,
Elsevier, vol. 65(1), pages 205-233, January.
- J. A. Hausman & W. K. Newey & J. L. Powel, 1988. "Nonlinear Errors in Variables: Estimation of Some Engel Curves," Working papers 504, Massachusetts Institute of Technology (MIT), Department of Economics.
- Härdle, W.K., 1992.
"Applied Nonparametric Methods,"
1992-6, Tilburg University, Center for Economic Research.
- HÄRDLE, Wolfgang, 1992. "Applied nonparametric methods," CORE Discussion Papers 1992003, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Hardle, W., 1992. "Applied Nonparametric Methods," Papers 9204, Catholique de Louvain - Institut de statistique.
- Wolfgang Hardle & Oliver Linton, 1994. "Applied Nonparametric Methods," Cowles Foundation Discussion Papers 1069, Cowles Foundation for Research in Economics, Yale University.
- Hardle, W., 1992. "Applied Nonparametric Methods," Papers 9206, Tilburg - Center for Economic Research.
- Barten, Anton P, 1977. "The Systems of Consumer Demand Functions Approach: A Review," Econometrica, Econometric Society, vol. 45(1), pages 23-51, January.
- Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-26, June.
- Deaton, Angus, 1986. "Demand analysis," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 3, chapter 30, pages 1767-1839 Elsevier.
- Blundell, Richard, 1988. "Consumer Behaviour: Theory and Empirical Evidence--a Survey," Economic Journal, Royal Economic Society, vol. 98(389), pages 16-65, March.
- Anderson, Heather M & Vahid, Farshid, 1997. "On the Correspondence between Individual and Aggregate Food Consumption Functions: Evidence from the USA and the Netherlands," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 12(5), pages 477-98, Sept.-Oct.
- Maddala, G S, 1971. "The Likelihood Approach to Pooling Cross-Section and Time-Series Data," Econometrica, Econometric Society, vol. 39(6), pages 939-53, November.
- Stoker, Thomas M, 1986. "Simple Tests of Distributional Effects on Macroeconomic Equations," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 763-95, August.
- Izan, Haji Y., 1980. "To pool or not to pool? : A reexamination of Tobin's food demand problem," Journal of Econometrics, Elsevier, vol. 13(3), pages 391-402, August.
- James Banks & Richard Blundell & Arthur Lewbel, 1997. "Quadratic Engel Curves And Consumer Demand," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 527-539, November.
- Barnett, William A, 1983. "New Indices of Money Supply and the Flexible Laurent Demand System," Journal of Business & Economic Statistics, American Statistical Association, vol. 1(1), pages 7-23, January.
- Blundell, Richard & Ray, Ranjan, 1984. "Testing for Linear Engel Curves and Additively Separable Preferences Using a New Flexible Demand System," Economic Journal, Royal Economic Society, vol. 94(376), pages 800-811, December.
- Muellbauer, John, 1976. "Community Preferences and the Representative Consumer," Econometrica, Econometric Society, vol. 44(5), pages 979-99, September.
- Arthur Lewbel, 1992. "Aggregation with Log-Linear Models," Review of Economic Studies, Oxford University Press, vol. 59(3), pages 635-642.
- Christensen, Laurits R & Jorgenson, Dale W & Lau, Lawrence J, 1975. "Transcendental Logarithmic Utility Functions," American Economic Review, American Economic Association, vol. 65(3), pages 367-83, June.
- Blundell, Richard & Pashardes, Panos & Weber, Guglielmo, 1993. "What Do We Learn About Consumer Demand Patterns from Micro Data?," American Economic Review, American Economic Association, vol. 83(3), pages 570-97, June.
- Diewert, W E, 1971. "An Application of the Shephard Duality Theorem: A Generalized Leontief Production Function," Journal of Political Economy, University of Chicago Press, vol. 79(3), pages 481-507, May-June.
- Oliver LINTON, .
"Applied nonparametric methods,"
Statistic und Oekonometrie
9312, Humboldt Universitaet Berlin.
When requesting a correction, please mention this item's handle: RePEc:ssa:lemwps:2001/16. 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: ()
If references are entirely missing, you can add them using this form.