Quantity versus Shares in Estimating Demand Systems

30 Pages Posted: 20 May 2012

See all articles by Quirino Paris

Quirino Paris

University of California, Davis - Department of Agricultural and Resource Economics

Francesco Caracciolo

University of Naples Federico II - Department of Agricultural Economics and Policy

Date Written: September 19, 2011

Abstract

This paper considers the estimation and testing of demand systems when the number of sample goods is smaller than the number of commodity choices available to consumers. In this case, the demand system is incomplete. The large majority of papers that appeared in the literature specifies and estimates a demand system in share format even when the system may be incomplete. The criterion for deciding whether a share format is admissible without loss of information is a test of the adding-up condition. This test, however, requires the estimation of a demand system in quantity format.

Keywords: demand systems, quantity format, share format, adding up

JEL Classification: C01, C31, C33, D12

Suggested Citation

Paris, Quirino and Caracciolo, Francesco, Quantity versus Shares in Estimating Demand Systems (September 19, 2011). Available at SSRN: https://ssrn.com/abstract=2062982 or http://dx.doi.org/10.2139/ssrn.2062982

Quirino Paris (Contact Author)

University of California, Davis - Department of Agricultural and Resource Economics ( email )

One Shields Avenue
Davis, CA 95616
United States
530-752-1528 (Phone)
530-752-5614 (Fax)

Francesco Caracciolo

University of Naples Federico II - Department of Agricultural Economics and Policy ( email )

Naples, Naples 80126
Italy

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
59
Abstract Views
600
Rank
648,767
PlumX Metrics