IDEAS home Printed from https://ideas.repec.org/a/wly/canjec/v34y2001i1p259-289.html
   My bibliography  Save this article

The rank and model specification of demand systems: an empirical analysis using United States microdata

Author

Listed:
  • Christopher J. Nicol

Abstract

A rank‐three demand system is estimated with United States Consumer Expenditure Survey microdata. A unique price data set is also used, which permits the analysis of effects of systematic errors in price variables. It is found that errors in price variables bias test results for the rank‐three hypothesis, in particular towards rejection. Other test results are affected to a lesser extent. Estimating smaller systems of demand equations, even when conditioning on excluded goods, yields significantly different results. Another important conclusion is that model specification is statistically significantly different for households of varying family sizes and housing tenure statuses. JEL Classifications: C31, D12. Le rang et la spécification du modèle des systèmes de demande: une analyse empirique utilisant des microdonnées américaines. On calibre un système de demande de rang trois à l'aide de microdonnées américaines tirées de la United States Consumer Expenditures Survey. Un ensemble unique de prix est utilisé afin de permettre l'analyse des effets d'erreurs systématiques dans les variables de prix. Il appert que les erreurs dans les variables de prix distorsionnent les résultats du test de l'hypothèse de rang trois en faveur d'un rejet. D'autres résultats de tests sont affectés à un moindre degré. Si l'on calibre de plus petits systèmes d'équations de demande, même en posant des conditions sur des biens exclus, des résultats qui diffèrent de manière significative s'ensuivent. Une autre conclusion importante est que la spécification du modèle est différente de manière statistiquement significative pour les ménages selon la taille de la famille et le statut domiciliaire.

Suggested Citation

  • Christopher J. Nicol, 2001. "The rank and model specification of demand systems: an empirical analysis using United States microdata," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 34(1), pages 259-289, February.
    • Handle: RePEc:wly:canjec:v:34:y:2001:i:1:p:259-289
    DOI: 10.1111/0008-4085.00074
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/0008-4085.00074
    Download Restriction: no
    File URL: https://libkey.io/10.1111/0008-4085.00074?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Panayiota Lyssiotou, 2003. "On estimating the cost of characteristics indices from consumer demand analysis," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 36(2), pages 326-349, May.
    2. Tiezzi, Silvia & Verde, Stefano F., 2016. "Differential demand response to gasoline taxes and gasoline prices in the U.S," Resource and Energy Economics, Elsevier, vol. 44(C), pages 71-91.
    3. Fortuna, Natercia, 2008. "Local rank tests in a multivariate nonparametric relationship," Journal of Econometrics, Elsevier, vol. 142(1), pages 162-182, January.
    4. Boonsaeng, Tullaya & Carpio, Carlos E., 2017. "Budget Allocation Patterns of American Household across Income Level in the 21 Century," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258245, Agricultural and Applied Economics Association.
    5. Xavier Labandeira & José M. Labeaga & Miguel Rodríguez, 2006. "A Residential Energy Demand System for Spain," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 87-112.
    6. W D A Bryant, 2009. "General Equilibrium:Theory and Evidence," World Scientific Books, World Scientific Publishing Co. Pte. Ltd., number 6875, August.
    7. Donald, Stephen G. & Fortuna, Natércia & Pipiras, Vladas, 2011. "Local and Global Rank Tests for Multivariate Varying-Coefficient Models," Journal of Business & Economic Statistics, American Statistical Association, vol. 29(2), pages 295-306.
    8. Desiderio Romero-Jordán & José Félix Sanz-Sanz, 2009. "Energy Taxes and Household Compliance with the Kyoto Protocol," Public Finance Review, , vol. 37(2), pages 142-169, March.
    9. Abiodun Elijah Obayelu & V.O. Okoruwa & O.I.Y. Ajani, 2009. "Cross‐sectional analysis of food demand in the North Central, Nigeria," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 1(2), pages 173-193, January.
    10. Nicol, C. J., 2003. "Elasticities of demand for gasoline in Canada and the United States," Energy Economics, Elsevier, vol. 25(2), pages 201-214, March.
    11. Lyssiotou, Panayiota, 2012. "Demographics and demand: Evaluation of alternative functional forms," Economics Letters, Elsevier, vol. 117(3), pages 627-631.
    12. Takashi Unayama, 2006. "The Engel curve for alcohol and the rank of demand systems," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 21(7), pages 1019-1038.
    13. Paul Oslington, 2012. "General Equilibrium: Theory and Evidence," The Economic Record, The Economic Society of Australia, vol. 88(282), pages 446-448, September.

    More about this item

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:canjec:v:34:y:2001:i:1:p:259-289. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1111/(ISSN)1540-5982 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.