Title

Calibration of Incomplete Demand Systems in Quantitative Analysis

Campus Units

Economics, Center for Agricultural and Rural Development

Document Type

Article

Publication Version

Submitted Manuscript

Publication Date

2004

Journal or Book Title

Applied Economics

Volume

36

First Page or Article ID Number

839

Last Page

847

DOI

10.1080/0003684042000229550

Abstract

An easily implemented and flexible calibration technique for partial demand systems is introduced, combining recent developments in incomplete demand systems and a set of restrictions conditioned on the available elasticity estimates. The technique accommodates various degrees of knowledge on cross-price elasticities, satisfies curvature restrictions, and allows the recovery of an exact welfare measure for policy analysis. The technique is illustrated with a partial demand system for food consumption in Korea for different states of knowledge on cross-price effects. The consumer welfare impact of food and agricultural trade liberalization is measured.

Comments

This working paper was published as Beghin, John C., Jean-Christophe Bureau and Sophie Drogué, "Calibration of incomplete demand systems in quantitative analysis," Applied Economics 36 (2004): 839–847, doi:10.1080/0003684042000229550.