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Introducing Asymmetric Separability in the FAST Multistage Demand System

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  • Bergtold, Jason S.
  • Peterson, Everett B.

Abstract

This paper determines the set of parametric restrictions required to maintain flexibility under asymmetric weak separability for the flexible and separable translog (FAST) multistage demand system. Because there is not a unique set of parametric restrictions that ensures separability and the values of the unconditional price and expenditure elasticities depend on the parametric restrictions imposed, the appropriateness of a chosen set of parametric restrictions should be tested empirically. An empirical example that illustrates how the choice of parametric restrictions affects the estimation results and the functional form of the price and expenditure elasticities is provided.

Suggested Citation

  • Bergtold, Jason S. & Peterson, Everett B., 2005. "Introducing Asymmetric Separability in the FAST Multistage Demand System," 2005 Annual meeting, July 24-27, Providence, RI 19497, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea05:19497
    DOI: 10.22004/ag.econ.19497
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    References listed on IDEAS

    as
    1. Bergtold, Jason S. & Akobundu, Eberechukwu & Peterson, Everett B., 2004. "The FAST Method: Estimating Unconditional Demand Elasticities for Processed Foods in the Presence of Fixed Effects," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 29(2), pages 1-20, August.
    2. Giancarlo Moschini & Daniele Moro & Richard D. Green, 1994. "Maintaining and Testing Separability in Demand Systems," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(1), pages 61-73.
    3. GianCarlo Moschini, 2001. "A Flexible Multistage Demand System Based on Indirect Separability," Southern Economic Journal, John Wiley & Sons, vol. 68(1), pages 22-41, July.
    4. Helen, Dale & Willett, Lois Schertz, 1986. "The Demand For Sweet Spreads: Demographic And Economic Effects For Detailed Commodities," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 15(2), pages 1-8, October.
    5. Christensen, Laurits R & Jorgenson, Dale W & Lau, Lawrence J, 1975. "Transcendental Logarithmic Utility Functions," American Economic Review, American Economic Association, vol. 65(3), pages 367-383, June.
    6. Driscoll, Paul J. & McGuirk, Anya M., 1992. "A Class Of Separability Flexible Functional Forms," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 17(2), pages 1-11, December.
    7. David L. Edgerton, 1997. "Weak Separability and the Estimation of Elasticities in Multistage Demand Systems," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(1), pages 62-79.
    8. Brown, Mark G. & Lee, Jonq-Ying & Seale, James L., Jr., 1994. "Demand Relationships Among Juice Beverages: A Differential Demand System Approach," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 26(2), pages 1-13, December.
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