An application of maximum entropy estimation: the demand for meat in the United Kingdom

In many econometric studies of demand relationships the design matrix is frequently subject to severe collinearity. In this paper the Generalized Maximum Entropy methodology is introduced and used to estimate a set of demand relationships. The ability of Generalized Maximum Entropy to estimate econo...

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Bibliographic Details
Published inApplied economics Vol. 32; no. 1; pp. 45 - 59
Main Author Fraser, Iain
Format Journal Article
LanguageEnglish
Published London, etc Taylor & Francis Group 01.01.2000
Taylor and Francis Journals
Chapman and Hall, etc
Taylor & Francis Ltd
SeriesApplied Economics
Subjects
Applied economics
Consumer demand
Demand
Econometrics
Entropy
Estimation
Meat
Meat market
Research methodology
Statistical analysis
Studies
United Kingdom
United Kingdom > UK
Online AccessGet full text
ISSN0003-6846
1466-4283
DOI10.1080/000368400322976

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Summary:In many econometric studies of demand relationships the design matrix is frequently subject to severe collinearity. In this paper the Generalized Maximum Entropy methodology is introduced and used to estimate a set of demand relationships. The ability of Generalized Maximum Entropy to estimate economic relationships that are typically subject to a high degree of collinearity among the explanatory variables, thus potentially causing traditional methods of estimation to be unreliable, is explained. The results derived by this alternative method of estimation, for a UK meat demand data set, are analysed and examined. The potential for this emerging estimation methodology is discussed.
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ISSN:0003-6846
1466-4283
DOI:10.1080/000368400322976