A Variant on the Arguments for the Invariance of Estimators in a Singular System of Equations

Keith R. McLaren

No 266969, Department of Econometrics and Business Statistics Working Papers from Monash University, Department of Econometrics and Business Statistics

Abstract: Allocation models such as consumer demand systems typicall imply a degenerate error structure. The usual approach in estimation is to delete one equation, and to appeal to the results of Barten(1969) or Powell(1969) that parameter estimates are invariant to the equation deleted. However such proofs of invariance are not straightforward. This paper demonstrates that such systems are observationally equivalent to structures common in the simultaneous equations literature, for which invariance is obvious, and hence provides a more transparent demonstration of conditions for invariance

Keywords: Agricultural; and; Food; Policy (search for similar items in EconPapers)
Pages: 18
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Persistent link: https://EconPapers.repec.org/RePEc:ags:monebs:266969

DOI: 10.22004/ag.econ.266969

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