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Preference Variable Impacts in Direct and Inverse Differential Demand Systems
Author(s) -
Brown Mark G.,
Lee Jonq-Ying
Publication year - 2010
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1093/ajae/aap036
Subject(s) - preference , inverse demand function , revealed preference , economics , variable (mathematics) , econometrics , marginal utility , inverse , microeconomics , mathematics , demand curve , mathematical analysis , geometry
Preference variables are included in the inverse Rotterdam model based on the Tintner‐Ichimura‐Basmann relationship linking preference effects on quantities demanded to price effects and preference effects on marginal utilities. Restrictions are placed on the effects of the preference variables on the marginal utilities, resulting in reductions in the parameter space for the preference variables in both direct and inverse demand systems. The model is used to analyze impacts of product quality on fresh citrus demand.