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A trigonometric flexible consumer demand system
Author(s) -
Matsuda Toshinobu
Publication year - 2006
Publication title -
canadian journal of economics/revue canadienne d'économique
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.773
H-Index - 69
eISSN - 1540-5982
pISSN - 0008-4085
DOI - 10.1111/j.0008-4085.2006.00342.x
Subject(s) - trigonometry , inflection point , aggregate (composite) , econometrics , point (geometry) , estimation , engel curve , economics , mathematics , computer science , mathematical economics , geometry , price index , materials science , management , composite material
. This paper proposes the first ever empirical specification of a trigonometric demand system. The new model is potentially useful because of some attractive features. It is flexible, amenable to exact aggregation over consumers, possessed of trigonometric Engel curves, which can oscillate, and able to have an unusually large regular region. With comparisons between the new model and two other popular models, an illustration is given for Japanese demand for non‐durables and services. The new model shows relatively gentle Engel curves with an inflection point on each of them, which seem reasonable, given that aggregate expenditure is used in parameter estimation. JEL classification: C51, D12