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Estimation of Income, Own- and Cross-Price Elasticities. An Application for Bulgaria

Author

Listed:
  • Stavrev, Emil

    (CERGE-EI, Czech Republic)

  • Kambourov, Gueorgui

    (CERGE-EI, Czech Republic)

Abstract

In this paper we estimate income elasticities and own- and cross-price elasticities for a number of categories of goods. The methodology used was proposed by Deaton (1987). Expenditure and quantity data from Household Budget Surveys for Bulgaria are used. The households are geographically separated into clusters. The prices are assumed to be the same within each of the clusters, so that the effects of income and other demographic factors on unit values are determined and the variances and covariances of the measurement errors estimated in the first stage. Then, in the second stage, the spatial price variation between the different clusters is used for the estimation of own- and cross-price elasticities for various categories of goods. We report income elasticities and own- and cross-price elasticities for eight goods.

Suggested Citation

  • Stavrev, Emil & Kambourov, Gueorgui, 1999. "Estimation of Income, Own- and Cross-Price Elasticities. An Application for Bulgaria," Transition Economics Series 6, Institute for Advanced Studies.
    • Handle: RePEc:ihs:ihstep:6
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    File URL: https://irihs.ihs.ac.at/id/eprint/1142
    File Function: First version, 1999
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    References listed on IDEAS

    as
    1. Deaton, Angus, 1987. "Estimation of own- and cross-price elasticities from household survey data," Journal of Econometrics, Elsevier, vol. 36(1-2), pages 7-30.
    2. Angus Deaton, 1991. "Price Elasticities from Survey Data: Extensions and Indonesian Results," International Economic Association Series, in: Marc Nerlove (ed.), Issues in Contemporary Economics, chapter 10, pages 253-283, Palgrave Macmillan.
    3. Magnus, Jan R. & Neudecker, H., 1986. "Symmetry, 0-1 Matrices and Jacobians: A Review," Econometric Theory, Cambridge University Press, vol. 2(2), pages 157-190, August.
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    1. repec:pru:wpaper:30 is not listed on IDEAS
    2. Stavrev, Emil & Kambourov, Gueorgui, 1999. "Share Equations versus Double Logarithmic Functions in the Estimation of Income, Own- and Cross-Price Elasticities," Transition Economics Series 7, Institute for Advanced Studies.

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    More about this item

    Keywords

    Own- and Cross-Price Elasticities; Income Elasticities; Unit Values; Quality Effects;
    All these keywords.

    JEL classification:

    • C39 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Other
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • R22 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Other Demand

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