Effective global regularity and empirical modeling of direct, inverse and mixed demand systems

Keith McLaren and K.K. Gary Wong

No 2/07, Monash Econometrics and Business Statistics Working Papers from Monash University, Department of Econometrics and Business Statistics

Abstract: In this paper, we utilize the notion of "effective global regularity" and the intuition stemming from Cooper and McLaren (1996)'s General Exponential Form to develop a family of "composite" (product and ratio) direct, inverse and mixed demand systems. Apart from having larger regularity regions, the resulting specifications are also of potentially arbitrary rank, which can better approximate non-linear Engel curves. We also make extensive use of duality theory and a numerical inversion estimation method to rectify the endogeneity problem encountered in the estimation of the mixed demand systems. We illustrate the techniques by estimating different types of demand systems for Japanese quarterly meat and fish consumption. Results generally indicate that the proposed methods are promising, and may prove beneficial for modeling systems of direct, inverse and mixed demand functions in the future.

Keywords: Effective Global Regularity; Mixed Demands; Conditional Indirect Utility Functions; Numerical Inversion Estimation Method (search for similar items in EconPapers)
JEL-codes: D11 D12 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2007-05
New Economics Papers: this item is included in nep-ecm and nep-upt
References: Add references at CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://www.buseco.monash.edu.au/ebs/pubs/wpapers/2007/wp2-07.pdf (application/pdf)

Related works:
Journal Article: Effective global regularity and empirical modelling of direct, inverse, and mixed demand systems (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:msh:ebswps:2007-2

Ordering information: This working paper can be ordered from
http://business.mona ... -business-statistics

Access Statistics for this paper

More papers in Monash Econometrics and Business Statistics Working Papers from Monash University, Department of Econometrics and Business Statistics PO Box 11E, Monash University, Victoria 3800, Australia. Contact information at EDIRC.
Bibliographic data for series maintained by Professor Xibin Zhang ().