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A Nonlinear Expenditure System Using a Linear Logit Specification

Author

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  • Timothy Tyrrell
  • Timothy Mount

Abstract

Recent literature on the estimation of models of consumer expenditure patterns indicates that Engel curves are nonlinear and demographic variables are important determinants of demand. A linear logit household expenditures model is presented which automatically displays "adding up" properties derived from the budget constraint while permitting great flexibility in the Engel curves. In addition, homogeneity and symmetry can be imposed and tested, and by a simple transformation the coefficients can be estimated by linear regression. Another advantage of the model is that demographic variables, such as household size and composition, can be introduced without sacrificing the "adding up" properties.

Suggested Citation

  • Timothy Tyrrell & Timothy Mount, 1982. "A Nonlinear Expenditure System Using a Linear Logit Specification," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 64(3), pages 539-546.
    • Handle: RePEc:oup:ajagec:v:64:y:1982:i:3:p:539-546.
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    File URL: http://hdl.handle.net/10.2307/1240646
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    Cited by:

    1. Chern, Wen S. & Lee, Hwang Jaw, 1989. "Nonparametric and Parametric Analyses of Demand for Food at Home and Away from Home," 1989 Annual Meeting, July 30-August 2, Baton Rouge, Louisiana 270706, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Considine, Timothy J., 2018. "Estimating concave substitution possibilities with non-stationary data using the dynamic linear logit demand model," Economic Modelling, Elsevier, vol. 72(C), pages 22-30.
    3. Dumagan, Jesus C. & Mount, Timothy D., 1996. "Global properties of well-behaved demand systems: A generalized logit model specification," Economic Modelling, Elsevier, vol. 13(2), pages 235-256, April.

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