Using an Almost Ideal Demand System in a Macro-Micro Modelling Context to Analyse Poverty and Inequalities

Luc Savard

Cahiers de recherche from Departement d'économique de l'École de gestion à l'Université de Sherbrooke

Abstract: In this paper, we explore the contribution of introducing a flexible form for household consumption in a macro-micro modelling context for poverty and income distribution analysis. The almost ideal demand system exhibits interesting features allowing for the introduction of inter-household heterogeneity in a rigorous fashion. In order to illustrate the contribution of the AIDS system in the macro-micro modelling context, we perform a comparative analysis with an equivalent model using a LES demand system and a CGE with representative households including an AIDS. Results show the strong contribution of using an almost ideal demand system in a microsimulation context and its value added versus a linear expenditure system to analyse poverty and income distribution changes following a policy simulation.

Keywords: Computable General Equilibrium Models; Estimation; Personal Income and Wealth Distribution; Measurement and Analysis of Poverty (search for similar items in EconPapers)
JEL-codes: C13 C68 D31 I32 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2010-02-04
New Economics Papers: this item is included in nep-cmp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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http://gredi.recherche.usherbrooke.ca/wpapers/GREDI-1004.pdf First version, 2010 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:shr:wpaper:10-04

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