We introduce an easily implemented and flexible calibration technique for partial demand systems, 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.
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.
Beghin, John C.; Bureau, Jean-Christophe; and Drogué, Sophie, "The Calibration of Incomplete Demand Systems in Quantitative Analysis" (2003). CARD Working Papers. 338.