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Chapter 3 The Differential Approach to Demand Analysis and the Rotterdam Model

In: Quantifying Consumer Preferences

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  • William A. Barnett
  • Apostolos Serletis

Abstract

This chapter presents the differential approach to applied demand analysis. The demand systems of this approach are general, having coefficients that are not necessarily constant. We consider the Rotterdam parameterization of differential demand systems and derive the absolute and relative price versions of the Rotterdam model, due to Theil (1965) and Barten (1966). We address estimation issues and point out that, unlike most parametric and semi-nonparametric demand systems, the Rotterdam model is econometrically regular.

Suggested Citation

  • William A. Barnett & Apostolos Serletis, 2009. "Chapter 3 The Differential Approach to Demand Analysis and the Rotterdam Model," Contributions to Economic Analysis, in: Quantifying Consumer Preferences, pages 61-81, Emerald Group Publishing Limited.
    • Handle: RePEc:eme:ceazzz:s0573-8555(2009)0000288006
    DOI: 10.1108/S0573-8555(2009)0000288006
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    Keywords

    differential demand systems;

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