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Specification and time series estimation of dynamic Gorman Polar Form demand systems

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  • Ray, Ranjan

Abstract

This paper proposes and estimates demand functional forms which are based on (a) nonseparable generalisations of LES, and (b) dynamic generalisations which extend the linear habit formation idea to incorporate more complex habit forming behaviour and allow purchases in the more distant past to affect current behaviour. The paper uses a new general demand functional form which, like the ‘Almost Ideal Demand System’, satisfies ‘consistent’ aggregation across individuals but, unlike it, allows for a separate test of linear Engel curves and additively separable preferences. The results of estimation on U.K. time series data (1900–1980) are, generally, positive and point to a degree of complexity in dynamic demand behaviour that is greater than seems to have been appreciated hitherto in the empirical literature.

Suggested Citation

  • Ray, Ranjan, 1985. "Specification and time series estimation of dynamic Gorman Polar Form demand systems," European Economic Review, Elsevier, vol. 27(3), pages 357-374.
    • Handle: RePEc:eee:eecrev:v:27:y:1985:i:3:p:357-374
    DOI: 10.1016/S0014-2921(85)80020-9
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    Cited by:

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    2. Burggraf, Christine & Kuhn, Lena & Zhao, Qiran & Glauben, Thomas & Teuber, Ramona, 2014. "Economic growth and nutrition transition: an empirical study comparing demand elasticities for foods in China and Russia," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182828, European Association of Agricultural Economists.
    3. Li, Gang & Song, Haiyan & Witt, Stephen F., 2006. "Time varying parameter and fixed parameter linear AIDS: An application to tourism demand forecasting," International Journal of Forecasting, Elsevier, vol. 22(1), pages 57-71.
    4. Holt, Matthew T., 2002. "Inverse demand systems and choice of functional form," European Economic Review, Elsevier, vol. 46(1), pages 117-142, January.
    5. Burggraf, Christine & Kuhn, Lena & Zhao, Qi-ran & Teuber, Ramona & Glauben, Thomas, 2015. "Economic growth and nutrition transition: An empirical analysis comparing demand elasticities for foods in China and Russia," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 14(6), pages 1008-1022.
    6. Burggraf, Christine & Kuhn, Lena & Zhao, Quiran & Teuber, Ramona & Glauben, Thomas, 2015. "Nutrition transition in two emerging countries: A comparison between China and Russia," 2015 Conference, August 9-14, 2015, Milan, Italy 211375, International Association of Agricultural Economists.
    7. Rickertsen, Kyrre, 1997. "The Demand for Meat: Conditional and Unconditional Elasticities," 1997 Occasional Paper Series No. 7 198192, International Association of Agricultural Economists.
    8. Isabel Cortés-Jiménez & Ramesh Durbarry & Manuela Pulina, 2009. "Estimation of Outbound Italian Tourism Demand: A Monthly Dynamic EC-LAIDS Model," Tourism Economics, , vol. 15(3), pages 547-565, September.

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