MINIMUM SAMPLE SIZE REQUIREMENTS FOR MAXIMUM LIKELIHOOD ESTIMATION OF SOME DEMAND MODELS

R. Harkema

No 272292, Econometric Institute Archives from Erasmus University Rotterdam

Abstract: The method of maximum likelihood is rather demanding, in the sense that a large number of observations is required in order to prevent the likelihood function from becoming unbounded. In this paper precise conditions are formulated such that the likelihood function associated with the Rotterdam model will be bounded under (a) conditions of homogeneity and symmetry and (b) the negativity condition. In addition it is shown that, surprisingly enough, the number of observations that is required to estimate the linear expenditure system is not smaller than the number that is required to estimate the Rotterdam model.

Keywords: Demand and Price Analysis; Research Methods/Statistical Methods (search for similar items in EconPapers)
Pages: 28
Date: 1985
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Persistent link: https://EconPapers.repec.org/RePEc:ags:eureia:272292

DOI: 10.22004/ag.econ.272292

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