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Economic examples of latent budget analysis

Juan Larrosa ()

European Economic Letters, 2013, vol. 2, issue 2, 44-49

Abstract: Latent budget analysis is a classification technique that allows clustering identification by using compositional data. This paper presents examples of how this technique deals with the unit-sum constraint by establishing an initial independence model to which subsequent models are compared in terms of their relative fitness degree. In fact, latent budget analysis does not impose linearity, homogeneity, or even specific distributions on data. Examples analyzed in this work help to understand some important relationships between capital stock composition and income or food diet composition in a heterogeneous sample of countries.

Keywords: Compositional data; Latent budget model; Capital composition data; Food composition data (search for similar items in EconPapers)
JEL-codes: C14 E22 H54 L66 R53 (search for similar items in EconPapers)
Date: 2013
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