EconPapers    
Economics at your fingertips  
 

Tricks with Hicks: The EASI Demand System

Arthur Lewbel () and Krishna Pendakur

American Economic Review, 2009, vol. 99, issue 3, 827-63

Abstract: We invent Implicit Marshallian demands, which combine desirable features of Hicksian and Marshallian demands. We propose and estimate the Exact Affine Stone Index (EASI) implicit Marshallian demand system. Like the Almost Ideal Demand (AID) system, EASI budget shares are linear in parameters given real expenditures. However, unlike the AID, EASI demands can have any rank and its Engel curves can have any shape over real expenditures. EASI error terms equal random utility parameters to account for unobserved preference heterogeneity. EASI demand functions can be estimated using GMM or three stage least squares, and, like AID, an approximate EASI model can be estimated by linear regression. (JEL D11, D12)

JEL-codes: D11 D12 (search for similar items in EconPapers)
Date: 2009
Note: DOI: 10.1257/aer.99.3.827
References: Add references at CitEc
Citations: View citations in EconPapers (98) Track citations by RSS feed

Downloads: (external link)
http://www.aeaweb.org/articles.php?doi=10.1257/aer.99.3.827 (application/pdf)
http://www.aeaweb.org/aer/data/june09/20070297_data.zip (application/zip)
http://www.aeaweb.org/aer/data/june09/20070297_app.pdf (application/pdf)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: Tricks With Hicks: The EASI Demand System (2008) Downloads
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: https://EconPapers.repec.org/RePEc:aea:aecrev:v:99:y:2009:i:3:p:827-63

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Review is currently edited by Esther Duflo

More articles in American Economic Review from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().

 
Page updated 2020-05-24
Handle: RePEc:aea:aecrev:v:99:y:2009:i:3:p:827-63