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An Empirical Comparison of Nonparametric and Parametric Engel Functions

Christopher J Nicol

Empirical Economics, 1993, vol. 18, issue 2, 233-49

Abstract: Nonparametric techniques are used to estimate income densities, Engel functions and their derivatives, and income elasticities. Nonparametric kernel methods give less ambiguous estimates of the densities than discrete, maximum penalized likelihood estimation. The nonparametric estimates of the Engel functions, their derivatives, and the income elasticities are compared with some corresponding parametric estimates. The nonparametric elasticity estimates are qualitatively similar to the parametric estimates. Some statistically significant differences are observed between the parametric versus nonparametric estimates, but not to the extent of having any major policy implications.

Date: 1993
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Empirical Economics is currently edited by Robert M. Kunst, Arthur H.O. van Soest, Bertrand Candelon, Subal C. Kumbhakar and Joakim Westerlund

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