THE CALIBRATION OF INCOMPLETE DEMAND SYSTEMS IN QUANTITATIVE ANALYSIS

John C. Beghin, Jean-Christophe Bureau and Sophie Drogue

No 18462, Hebrew University of Jerusalem Archive from Hebrew University of Jerusalem

Abstract: We introduce an easily implemented and flexible calibration technique for partial demand systems, combining recent developments in incomplete demand systems and a set of restrictions conditioned on the available elasticity estimates. The technique accommodates various degrees of knowledge on cross-price elasticities, satisfies curvature restrictions, and allows the recovery of an exact welfare measure for policy analysis. The technique is illustrated with a partial demand system for food consumption in Korea for different states of knowledge on cross-price effects. The consumer welfare impact of food and agricultural trade liberalization is measured.

Keywords: Demand; and; Price; Analysis (search for similar items in EconPapers)
Pages: 18
Date: 2003
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Persistent link: https://EconPapers.repec.org/RePEc:ags:hebarc:18462

DOI: 10.22004/ag.econ.18462

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