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Flexible Multistage Demand System Based on Indirect Separability, A

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Abstract

The notion of indirect separability is exploited to derive a new multistage demand system. The model allows a consistent parameterization of demand relations at various budgeting stages and it fulfills the requirement of flexibility while satisfying separability globally. Two propositions are derived to characterize flexible and separable functional forms, which lead to the specification of a flexible and separable translog (FAST) demand system. The model is particularly attractive for modeling large complete demand systems, and is illustrated with an application to Canadian food demand.

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  • GianCarlo Moschini, 2000. "Flexible Multistage Demand System Based on Indirect Separability, A," Center for Agricultural and Rural Development (CARD) Publications 00-wp265, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    • Handle: RePEc:ias:cpaper:00-wp265
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    3. Maria Erlinda M. Mutuc & Suwen Pan & Roderick M. Rejesus, 2007. "Household vegetable demand in the Philippines: Is there an urban-rural divide?," Agribusiness, John Wiley & Sons, Ltd., vol. 23(4), pages 511-527.
    4. Per Hjertstrand & James Swofford, 2012. "Revealed preference tests for consistency with weakly separable indirect utility," Theory and Decision, Springer, vol. 72(2), pages 245-256, February.
    5. 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.
    6. Hjertstrand, Per & Swofford, James L., 2019. "Revealed preference tests of indirect and homothetic weak separability of financial assets, consumption and leisure," Journal of Financial Stability, Elsevier, vol. 42(C), pages 108-114.
    7. Agbola, Frank W. & Maitra, Pushkar & McLaren, Keith Robert, 2002. "The Analysis of Consumer Demand for Food in South Africa: An Application of the Modified Almost Ideal Demand System: Some Preliminary Results," 2002 Conference (46th), February 13-15, 2002, Canberra, Australia 125047, Australian Agricultural and Resource Economics Society.
    8. Sébastien Pouliot & Bruno Larue, 2012. "Import sensitive products and perverse tariff-rate quota liberalization," Canadian Journal of Economics, Canadian Economics Association, vol. 45(3), pages 903-924, August.
    9. Adrian R. Fleissig, 2016. "Changing Trends in U.S. Alcohol Demand," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 44(3), pages 263-276, September.
    10. Stoeckl, Natalie & Farr, Marina & Larson, Silva & Adams, Vanessa M. & Kubiszewski, Ida & Esparon, Michelle & Costanza, Robert, 2014. "A new approach to the problem of overlapping values: A case study in Australia׳s Great Barrier Reef," Ecosystem Services, Elsevier, vol. 10(C), pages 61-78.
    11. 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).

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