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Comparison of several demand systems

Author

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  • Meyer, Stefan
  • Yu, Xiaohua
  • Abler, David G.

Abstract

Using Monte-Carlo simulation, , we compare the most popular demand systems including the LES, AIDS, BTL, QES, QUAIDS and AIDADS, and find that different models actually have different advantages in estimating different elasticities. Specifically, QES, AIDS and AIDADS models are the best in income, own-price and cross-price elasticities, respectively. Overall, AIDADS model has the best performance. The results indicate that the rank three models are not necessary always better than the rank two models.

Suggested Citation

  • Meyer, Stefan & Yu, Xiaohua & Abler, David G., 2011. "Comparison of several demand systems," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103736, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea11:103736
    DOI: 10.22004/ag.econ.103736
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    References listed on IDEAS

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    1. Giancarlo Moschini & Karl D. Meilke, 1989. "Modeling the Pattern of Structural Change in U.S. Meat Demand," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(2), pages 253-261.
    2. James Banks & Richard Blundell & Arthur Lewbel, 1997. "Quadratic Engel Curves And Consumer Demand," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 527-539, November.
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    Cited by:

    1. Ngueuleweu Tiwang, Gildas, 2020. "Ph.D in Economics, Option Agricultural Economics," MPRA Paper 99798, University Library of Munich, Germany, revised 2020.
    2. Bouët, Antoine & Femenia, Fabienne & Laborde, David, 2014. "On the role of demand systems in CGE simulations of trade reforms," Conference papers 332443, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    3. Zhou, De & Yu, Xiaohua & Abler, David & Chen, Danhong, 2020. "Projecting meat and cereals demand for China based on a meta-analysis of income elasticities," China Economic Review, Elsevier, vol. 59(C).
    4. Colchero, M.A. & Salgado, J.C. & Unar-Munguía, M. & Hernández-Ávila, M. & Rivera-Dommarco, J.A., 2015. "Price elasticity of the demand for sugar sweetened beverages and soft drinks in Mexico," Economics & Human Biology, Elsevier, vol. 19(C), pages 129-137.
    5. Widenhorn, Andreas & Salhofer, Klaus, 2014. "Using a Generalized Differenced Demand Model to Estimate Price and Expenditure Elasticities for Milk and Meat in Austria," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 63(2).
    6. Sanvi Avouyi-Dovi & Christian Pfister & Franck Sédillot, 2019. "French Households’ Portfolio: The Financial Almost Ideal Demand System Appraisal," Working papers 728, Banque de France.
    7. Widenhorn, Andreas & Salhofer, Klaus, 2014. "Using a Generalized Differenced Demand Model to Estimate Price and Expenditure Elasticities for Milk and Meat in Austria," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 63(02), pages 1-16, June.
    8. Zhaoxin Liu & Erik Ansink, 2024. "Price elasticities of meat, fish and plant-based meat substitutes: evidence from store-level Dutch supermarket scanner data," Tinbergen Institute Discussion Papers 24-046/VIII, Tinbergen Institute.

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    Keywords

    Consumer/Household Economics; Demand and Price Analysis; Research Methods/ Statistical Methods;
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