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Quantity Versus Shares in Estimating Demand Systems

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  • Paris, Quirino
  • Caracciolo, Francesco

Abstract

This paper considers the estimation and testing of demand systems when the number of sample goods is smaller than the number of commodity choices available to consumers. In this case, the demand system is incomplete. The large majority of papers that appeared in the literature specifies and estimates a demand system in share format even when the system may be incomplete. The criterion for deciding whether a share format is admissible without loss of information is a test of the adding-up condition. This test, however, requires the estimation of a demand system in quantity format.

Suggested Citation

  • Paris, Quirino & Caracciolo, Francesco, 2012. "Quantity Versus Shares in Estimating Demand Systems," Working Papers 124575, University of California, Davis, Department of Agricultural and Resource Economics.
    • Handle: RePEc:ags:ucdavw:124575
    DOI: 10.22004/ag.econ.124575
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    References listed on IDEAS

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