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Demographic Demand Systems With Application To Equivalence Scales Estimation And Inequality Analysis: The Australian Evidence

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  • PAUL BLACKLOW
  • AARON NICHOLAS
  • RANJAN RAY

Abstract

This paper proposes and applies an alternative demographic procedure for extending a demand system to allow for the effect of household size and composition changes, along with price changes, on expenditure allocation. The demographic procedure is applied to two recent demand functional forms to obtain their estimable demographic extensions. The estimation on pooled time series of Australian Household Expenditure Surveys yields sensible and robust estimates of the equivalence scale, and of its variation with relative prices. Further evidence on the usefulness of this procedure is provided by using it to evaluate the nature and magnitude of the inequality bias of relative price changes in Australia over a period from the late 1980s to the early part of the new millennium.

Suggested Citation

  • Paul Blacklow & Aaron Nicholas & Ranjan Ray, 2010. "Demographic Demand Systems With Application To Equivalence Scales Estimation And Inequality Analysis: The Australian Evidence," Australian Economic Papers, Wiley Blackwell, vol. 49(3), pages 161-179, September.
    • Handle: RePEc:bla:ausecp:v:49:y:2010:i:3:p:161-179
    DOI: 10.1111/j.1467-8454.2010.00394.x
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    Cited by:

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    2. Christian Dudel & Jan Marvin Garbuszus & Julian Schmied, 2021. "Assessing differences in household needs: a comparison of approaches for the estimation of equivalence scales using German expenditure data," Empirical Economics, Springer, vol. 60(4), pages 1629-1659, April.
    3. Li, Lianyou & Song, Ze & Ma, Chao, 2015. "Engel curves and price elasticity in urban Chinese Households," Economic Modelling, Elsevier, vol. 44(C), pages 236-242.
    4. Robin Winkler, 2015. "Feast or Famine: The Welfare Impact of Food Price Controls in Nazi Germany," Economics Series Working Papers Number 136, University of Oxford, Department of Economics.
    5. Robin Winkler, 2015. "Feast or Famine: The Welfare Impact of Food Price Controls in Nazi Germany," Oxford Economic and Social History Working Papers _136, University of Oxford, Department of Economics.
    6. Brian P. Poi, 2012. "Easy demand-system estimation with quaids," Stata Journal, StataCorp LP, vol. 12(3), pages 433-446, September.
    7. Gostkowski Michał, 2018. "Elasticity of Consumer Demand: Estimation Using a Quadratic Almost Ideal Demand System," Econometrics. Advances in Applied Data Analysis, Sciendo, vol. 22(1), pages 68-78, March.
    8. Brad R. Humphreys & Jane E. Ruseski & Jie Yang, 2020. "Household consumption decisions: will expanding sports betting impact health?," Review of Economics of the Household, Springer, vol. 18(4), pages 1079-1100, December.
    9. Shuoli Zhao & Lingxiao Wang & Wuyang Hu & Yuqing Zheng, 2023. "Meet the meatless: Demand for new generation plant‐based meat alternatives," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 45(1), pages 4-21, March.
    10. Nikodinoska, Dragana & Schröder, Carsten, 2016. "On the emissions–inequality and emissions–welfare trade-offs in energy taxation: Evidence on the German car fuels tax," Resource and Energy Economics, Elsevier, vol. 44(C), pages 206-233.
    11. Aleksandr Vashchilko, 2012. "Households' Expenditure Patterns in Belarus," BEROC Working Paper Series 20, Belarusian Economic Research and Outreach Center (BEROC).

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    More about this item

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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