Title

A Flexible Multistage Demand System Based on Indirect Separability

Campus Units

Economics, Center for Agricultural and Rural Development

Document Type

Article

Publication Version

Submitted Manuscript

Publication Date

7-2001

Journal or Book Title

Southern Economic Journal

Volume

68

Issue

1

First Page or Article ID Number

22

Last Page

41

DOI

10.2307/1061509

Abstract

The notion of indirect separability is exploited to derive a new multistage demand system. The model allows a consistent parameterization of demand relations at various budgeting stages and it fulfills the requirement of flexibility while satisfying separability globally. Two propositions are derived to characterize flexible and separable functional forms, which lead to the specifi- cation of a flexible and separable translog (FAST) demand system. The model is particularly attractive for modeling large complete demand systems and is illustrated with an application to Canadian food demand.

Comments

This is a working paper of an article from Southern Economic Journal 68 (2001): 22, doi: 10.2307/1061509.