A rational rank four demand system

Arthur Lewbel ()

Journal of Applied Econometrics, 2003, vol. 18, issue 2, pages 127-135

Abstract: Past parametric tests of demand system rank employed polynomial Engel curve systems. However, by Gorman's (1981) theorem, the maximum possible rank of a utility-derived polynomial demand system is three. The present paper proposes a class of demand systems that are utility derived, are close to polynomial, and have rank four. These systems nest rational polynomial demands, and so can be used to test ranks up to four. These systems are suitable for applications where high rank is likely, such as demand systems involving a large number of goods. A test of rank using this new class of systems is applied to UK consumer demand data. Copyright © 2002 John Wiley & Sons, Ltd.

Date: 2003
View list of references View citations in EconPapers

Downloads: (external link)
http://hdl.handle.net/10.1002/jae.677 Link to full text; subscription required (text/html)
http://qed.econ.queensu.ca:80/jae/2003-v18.2/ Supporting data files and programs (text/html)

Related works:
Working Paper: A Rational Rank Four Demand System (2003)
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: http://EconPapers.repec.org/RePEc:jae:japmet:v:18:y:2003:i:2:p:127-135

Ordering information: This journal article can be ordered from
http://www3.intersci ... e.jsp?issn=0883-7252

Access Statistics for this article

Journal of Applied Econometrics is edited by M. Hashem Pesaran

More articles in Journal of Applied Econometrics from John Wiley & Sons, Ltd.
Series data maintained by Christopher F. Baum ().