Testing Hicksian Separability Over Space
If relative prices of goods within a commodity group are constant, Hicksian separability lets the price of a single good represent the group price level. This is relied on by price questionnaires used in household surveys. Methods of estimating demand systems from household survey data also rely on Hicksian separability. Yet this restriction, and its weaker stochastic form under the Generalized Composite Commodity Theorem, remains untested in cross-sections. We use unique data from Vietnam with multiple specifications from within the same food groups to test if within-group relative prices are constant over space. The data firmly reject these restrictions.
|Date of creation:||06 May 2013|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: + 64 (0)7 838 4758 (Administrator)
Fax: + 64 7 838 4331
Web page: http://cms.mngt.waikato.ac.nz/departments/economics
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.:
- Shumway, C. Richard & Davis, George C., 2001.
"Does consistent aggregation really matter?,"
Australian Journal of Agricultural and Resource Economics,
Australian Agricultural and Resource Economics Society, vol. 45(2), June.
- Asche, F. & Bremnes, H. & Wessells, C.R., 1998.
"Product Aggregation, Market Integration and Relationships Between Prices: an Application to World Salmon Markets,"
27/98, Norwegian School of Economics and Business Administration-.
- Frank Asche & Helge Bremnes & Cathy R. Wessells, 1999. "Product Aggregation, Market Integration, and Relationships between Prices: An Application to World Salmon Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(3), pages 568-581.
- Borcherding, Thomas E & Silberberg, Eugene, 1978. "Shipping the Good Apples Out: The Alchian and Allen Theorem Reconsidered," Journal of Political Economy, University of Chicago Press, vol. 86(1), pages 131-38, February.
- Lewbel, Arthur, 1996. "Aggregation without Separability: A Generalized Composite Commodity Theorem," American Economic Review, American Economic Association, vol. 86(3), pages 524-43, June.
- Deaton, Angus, 1988.
"Quality, Quantity, and Spatial Variation of Price,"
American Economic Review,
American Economic Association, vol. 78(3), pages 418-30, June.
- Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-26, June.
- McKelvey, Christopher, 2011. "Price, unit value, and quality demanded," Journal of Development Economics, Elsevier, vol. 95(2), pages 157-169, July.
When requesting a correction, please mention this item's handle: RePEc:wai:econwp:13/07. 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: (Brian Silverstone)
If references are entirely missing, you can add them using this form.