A model of a complete system of k linear expenditure functions introduced by Leser in 1960 [6, 7] has the advantage of great computational simplicity. An arbitrary specification, however, equating all cross elasticities of substitution results in unreliable estimate of price effects. In the present paper, a result in the theory of additive preferences [Houthakker, 5] is used in order to obtain a more plausible specification. This is achieved at the expense of an iterative procedure; however, the number of parameters (2k + 1) is identical in both models. A system of ten equations is fitted to Australian personal consumption data for the period 1949-50 to 1961-62.
MLA
Powell, Alan. “A Complete System of Consumer Demand Equations for the Australian Economy Fitted by a Model of Additive Preferences.” Econometrica, vol. 34, .no 3, Econometric Society, 1966, pp. 661-675, https://www.jstor.org/stable/1909775
Chicago
Powell, Alan. “A Complete System of Consumer Demand Equations for the Australian Economy Fitted by a Model of Additive Preferences.” Econometrica, 34, .no 3, (Econometric Society: 1966), 661-675. https://www.jstor.org/stable/1909775
APA
Powell, A. (1966). A Complete System of Consumer Demand Equations for the Australian Economy Fitted by a Model of Additive Preferences. Econometrica, 34(3), 661-675. https://www.jstor.org/stable/1909775
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