Demographics and demand: Evaluation of alternative functional forms

Panayiota Lyssiotou

Economics Letters, 2012, vol. 117, issue 3, 627-631

Abstract: We evaluate the role of functional form of demographics in demand analysis by proposing the GQL ‘unstructured’ demographically transformed model which nests the Barten–Gorman demographically modified model and popular rank-3 and rank-2 demand systems. We use UK individual data and find that the equivalence of the ‘unstructured’ and Barten–Gorman forms and identification of meaningful equivalence scales depend on the degree of flexibility of the demand system in demographic, price and income effects.

Keywords: Demographics; Equivalence scales; Consumption economies of scale; Barten–Gorman model; GQL model; Preference heterogeneity (search for similar items in EconPapers)
JEL-codes: D12 I3 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:117:y:2012:i:3:p:627-631

DOI: 10.1016/j.econlet.2012.08.001

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