Differential consumer demand systems

It is shown in this paper that several well-known systems like the Rotterdam model and the Almost Ideal Demand System can be seen as different parametrizations of the budget share differential equation. Using a third parametrization a new system, called the CBS system, is developed and discussed. Sp...

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Published inEuropean economic review Vol. 27; no. 3; pp. 375 - 390
Main Authors Keller, W.J., Van Driel, J.
Format Journal Article
LanguageEnglish
Published Amsterdam, etc Elsevier B.V 01.01.1985
North Holland Publishing Company, etc
Elsevier Sequoia S.A
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Abstract It is shown in this paper that several well-known systems like the Rotterdam model and the Almost Ideal Demand System can be seen as different parametrizations of the budget share differential equation. Using a third parametrization a new system, called the CBS system, is developed and discussed. Special attention is given to the relative price version of the system and in particular to the special case of preference independence. Some estimates for the Netherlands based on time series for 1953–1981, using various approaches, are presented.
AbstractList It is shown in this paper that several well-known systems like the Rotterdam model and the Almost Ideal Demand System can be seen as different parametrizations of the budget share differential equation. Using a third parametrization a new system, called the CBS system, is developed and discussed. Special attention is given to the relative price version of the system and in particular to the special case of preference independence. Some estimates for the Netherlands based on time series for 1953–1981, using various approaches, are presented.
Alternatives are presented to the familiar Rotterdam model for consumer demand, with emphasis on estimation. An attempt is made to estimate characteristics of consumer behavior; in particular, attention is focused on problems related to the specification and estimation of the Engel curve and the Slutsky coefficients. Some estimates for the Netherlands based on time series for 1953-1981, using various approaches, are given. It is found that, by simple substitutions and assumptions, other models can be derived, such as the approximate Almost Ideal Demand System (AIDS) model and 2 new models - the CBS (the Netherlands Central Bureau of Statistics) and the CBS/PI (preference independence). The CBS model offers a clear advantage over the AIDS model in that it allows the direct imposition of concavity on the matrix of Slutsky coefficients. If the number of observations is small, the CBS/PI model might be a good starting point.
Author Keller, W.J.
Van Driel, J.
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SSID ssj0001187
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Snippet It is shown in this paper that several well-known systems like the Rotterdam model and the Almost Ideal Demand System can be seen as different parametrizations...
Alternatives are presented to the familiar Rotterdam model for consumer demand, with emphasis on estimation. An attempt is made to estimate characteristics of...
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elsevier
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Publisher
StartPage 375
SubjectTerms Consumer
Demand
Estimating techniques
Manyproducts
Mathematical models
Statistical analysis
Title Differential consumer demand systems
URI https://dx.doi.org/10.1016/S0014-2921(85)80021-0
https://www.proquest.com/docview/1292682027/abstract/
https://www.proquest.com/docview/198067907/abstract/
Volume 27
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