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The Generalized Quadratic Expenditure System

  • Jeffrey LaFrance
  • Rulon Pope

    ()

    (School of Economic Sciences, Washington State University)

This chapter presents the indirect preferences for all full rank Gorman and Lewbel demand systems. Each member in this class of demand models is a Generalized Quadratic Expenditure System (GQES). This representation allows applied researchers to choose a small number of price indices and a function of income to specify any exactly aggregable demand system, without the need to revisit the questions of integrability of the demand equations or the implied form and structure of indirect preferences. This characterization also allows for the calculation of exact welfare measures for consumers, either in the aggregate or for specific classes of individuals, and other valuations of interest to applied researchers.

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File URL: http://faculty.ses.wsu.edu/WorkingPapers/LaFrance/LP-Generalized-QES.pdf
File Function: First version, 2008
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Paper provided by School of Economic Sciences, Washington State University in its series Working Papers with number 2008-27.

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Length: 49 pages
Date of creation: Dec 2008
Date of revision:
Handle: RePEc:wsu:wpaper:lafrance-2
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Web page: http://faculty.ses.wsu.edu/

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  1. Muellbauer, John, 1975. "Aggregation, Income Distribution and Consumer Demand," Review of Economic Studies, Wiley Blackwell, vol. 42(4), pages 525-43, October.
  2. Burt, Oscar R & Brewer, Durward, 1971. "Estimation of Net Social Benefits from Outdoor Recreation," Econometrica, Econometric Society, vol. 39(5), pages 813-27, September.
  3. LaFrance, Jeffrey T. & Beatty, Timothy K. M. & Pope, Rulon D, 2004. "Building Gorman's nest," CUDARE Working Paper Series 0961, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
  4. Jorgenson, Dale W & Slesnick, Daniel T, 1987. "Aggregate Consumer Behavior and Household Equivalence Scales," Journal of Business & Economic Statistics, American Statistical Association, vol. 5(2), pages 219-32, April.
  5. Jeffrey T. LaFrance & Rulon D. Pope, 2008. "Homogeneity and Supply," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(3), pages 606-612.
  6. LaFrance, Jeffrey T & Pope, Rulon D., 2006. "Full Rank Rational Demand Systems," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt8qx7n6p9, Department of Agricultural & Resource Economics, UC Berkeley.
  7. Jorgenson, Dale W & Lau, Lawrence J & Stoker, Thomas M, 1980. "Welfare Comparison under Exact Aggregation," American Economic Review, American Economic Association, vol. 70(2), pages 268-72, May.
  8. Jerison, Michael, 1993. "Russell on Gorman's Engel curves : A correction," Economics Letters, Elsevier, vol. 43(2), pages 171-175.
  9. Russel J. Cooper & Keith R. McLaren, 1992. "An Empirically Oriented Demand System with Improved Regularity Properties," Canadian Journal of Economics, Canadian Economics Association, vol. 25(3), pages 652-68, August.
  10. Cicchetti, Charles J & Fisher, Anthony C & Smith, V Kerry, 1976. "An Econometric Evaluation of a Generalized Consumer Surplus Measure: The Mineral King Controversy," Econometrica, Econometric Society, vol. 44(6), pages 1259-76, November.
  11. Diewert, Walter E & Wales, Terence J, 1987. "Flexible Functional Forms and Global Curvature Conditions," Econometrica, Econometric Society, vol. 55(1), pages 43-68, January.
  12. Cooper, Russel J & McLaren, Keith R, 1996. "A System of Demand Equations Satisfying Effectively Global Regularity Conditions," The Review of Economics and Statistics, MIT Press, vol. 78(2), pages 359-64, May.
  13. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-26, June.
  14. LaFrance, Jeffrey T., 2008. "The structure of US food demand," Journal of Econometrics, Elsevier, vol. 147(2), pages 336-349, December.
  15. Blundell, Richard, 1988. "Consumer Behaviour: Theory and Empirical Evidence--a Survey," Economic Journal, Royal Economic Society, vol. 98(389), pages 16-65, March.
  16. Russell, Thomas & Farris, Frank, 1993. "The geometric structure of some systems of demand equations," Journal of Mathematical Economics, Elsevier, vol. 22(4), pages 309-325.
  17. Jorgenson, Dale W & Slesnick, Daniel T, 1984. "Aggregate Consumer Behaviour and the Measurement of Inequality," Review of Economic Studies, Wiley Blackwell, vol. 51(3), pages 369-92, July.
  18. Keith R. McLaren & K.K. Gary Wong, 2007. "Effective global regularity and empirical modeling of direct, inverse and mixed demand systems," Monash Econometrics and Business Statistics Working Papers 2/07, Monash University, Department of Econometrics and Business Statistics.
  19. Lewbel, Arthur, 1987. "Fractional demand systems," Journal of Econometrics, Elsevier, vol. 36(3), pages 311-337, November.
  20. Jeffrey T. LaFrance & Timothy K. Beatty & Rulon D. Pope, 2006. "Gorman Engel Curves for Incomplete Demand Systems," Monash Economics Working Papers archive-23, Monash University, Department of Economics.
  21. Barnett, William A. & Lee, Yul W. & Wolfe, Michael D., 1985. "The three-dimensional global properties of the minflex laurent, generalized leontief, and translog flexible functional forms," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 3-31.
  22. Russell, Thomas, 1996. "Gorman demand systems and lie transformation groups: A reply," Economics Letters, Elsevier, vol. 51(2), pages 201-204, May.
  23. 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.
  24. Russell, Thomas & Farris, Frank, 1998. "Integrability, Gorman systems, and the lie bracket structure of the real line," Journal of Mathematical Economics, Elsevier, vol. 29(2), pages 183-209, March.
  25. Brown, Bryan W & Walker, Mary Beth, 1989. "The Random Utility Hypothesis and Inference in Demand Systems," Econometrica, Econometric Society, vol. 57(4), pages 815-29, July.
  26. 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.
  27. Lewbel, Arthur, 1991. "The Rank of Demand Systems: Theory and Nonparametric Estimation," Econometrica, Econometric Society, vol. 59(3), pages 711-30, May.
  28. Pollak, Robert A, 1969. "Conditional Demand Functions and Consumption Theory," The Quarterly Journal of Economics, MIT Press, vol. 83(1), pages 60-78, February.
  29. Diewert, W E & Wales, T J, 1988. "Normalized Quadratic Systems of Consumer Demand Functions," Journal of Business & Economic Statistics, American Statistical Association, vol. 6(3), pages 303-12, July.
  30. Muellbauer, John, 1976. "Community Preferences and the Representative Consumer," Econometrica, Econometric Society, vol. 44(5), pages 979-99, September.
  31. Howe, Howard & Pollak, Robert A & Wales, Terence J, 1979. "Theory and Time Series Estimation of the Quadratic Expenditure System," Econometrica, Econometric Society, vol. 47(5), pages 1231-47, September.
  32. van Daal, Jan & Merkies, Arnold H Q M, 1989. "A Note on the Quadratic Expenditure Model," Econometrica, Econometric Society, vol. 57(6), pages 1439-43, November.
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