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A Flexible Multistage Demand System Based on Indirect Separability

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  • Moschini, Giancarlo

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 specifi- cation 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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  • Moschini, Giancarlo, 2001. "A Flexible Multistage Demand System Based on Indirect Separability," ISU General Staff Papers 200107010700001289, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genstf:200107010700001289
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    3. 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.
    4. 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.
    5. 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.
    6. 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).
    7. Abiodun O. OTUNAIYA & Adebayo M. SHITTU, 2014. "Complete household demand system of vegetables in Ogun State, Nigeria," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 60(11), pages 509-516.
    8. 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.
    9. 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.
    10. 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.
    11. 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.

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