Testing non-nested demand relations: linear expenditure system versus indirect addilog

Testing Multiple Non-nested Factor Demand Systems

Empirical factor demand analysis typically involves making a choice from among several competing non-nested functional forms. Each of the commonly used factor demand systems, such as Translog, Generalized Leontief, Quadratic, and Generalized McFadden, can provide a valid and useful empirical description of the underlying production structure of the firm. As there is no theoretical guidance on s...

Primal-Dual Estimation of a Linear Expenditure Demand System

Efficient estimates require the utilization of all the available theoretical and statistical information. This fact suggests that econometric models based on an explicit optimization theory might achieve more efficient estimates when all the primal and dual relations are used for a joint estimation of the model’s parameters. We present a discussion of this idea using a Linear Expenditure System...

Testing Restrictions in a Flexible Dynamic Demand System: An Application to Consumers' Expenditure in Canada

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Aggregate Demand and Expenditure

Consumption Expenditure Of the four components of aggregate demand, consumption expenditure C is the largest contributing to between 60% and 70% of total expenditure. For this reason, we often start our analysis with this particular component. This category of expenditure includes private spending on durable goods (automobiles, electronic goods, appliances, ... ), non-durable goods (food, cloth...

Linear Expenditure Systems and Demand Analysis: An Application to the Pattern of British Demand