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A Comment on Consumer Demand Systems with Binding Non-Negativity Constraints

Michael Ransom ()

No 572, Working Papers from Princeton University, Department of Economics, Industrial Relations Section.

Abstract: Wales and Woodland (1983) have proposed an econometric model to deal with non-negativity constraints in systems of demand equations. This paper points out the relationship between the Wales-Woodland model and the "simultaneous Tobit" model of Amemiya (1974). This relationship is important because Amemiya has proposed a simple estimation procedure that can be utilized for some cases of the Wales-Woodland model. The issue of internal consistency for models of this type is discussed. I point out that internal consistency for the Wales-Woodland model is equivalent to the second order condition for systems without quantity constraints.

Keywords: constraints; limited dependent variables; demand system (search for similar items in EconPapers)
Date: 1985-06
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Journal Article: A comment on consumer demand systems with binding non-negativity constraints (1987) Downloads
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