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Bayesian inference of a smooth transition dynamic almost ideal model of food demand in the US

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  • Balcombe, Kelvin
  • Bailey, Alastair

Abstract

A dynamic ‘smooth transition’ Almost Ideal model is estimated for food consumption in the US. A Metropolis-Hastings algorithm is employed to map the posterior distributions and rejection sampling is used to evaluate and impose curvature restrictions at more than one point in the sample. The findings support the contention of structural change of a ‘smooth transition’ nature. Notably, the income food elasticity of demand becomes smaller through time, and the own price elasticities for food and non food become more elastic.

Suggested Citation

  • Balcombe, Kelvin & Bailey, Alastair, 2006. "Bayesian inference of a smooth transition dynamic almost ideal model of food demand in the US," MPRA Paper 17305, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:17305
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    References listed on IDEAS

    as
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    7. Deschamps, Philippe J., 2000. "Exact small-sample inference in stationary, fully regular, dynamic demand models," Journal of Econometrics, Elsevier, vol. 97(1), pages 51-91, July.
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    More about this item

    Keywords

    Consumption Bayesian;

    JEL classification:

    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General

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