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Estimation of Engel Curves from Survey Data with Zero Expenditures *
Author(s) -
Hasegawa Hikaru,
Ueda Kazuhiro,
Mori Kunie
Publication year - 2008
Publication title -
oxford bulletin of economics and statistics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.131
H-Index - 73
eISSN - 1468-0084
pISSN - 0305-9049
DOI - 10.1111/j.1468-0084.2008.00507.x
Subject(s) - unobservable , equivalence (formal languages) , markov chain monte carlo , engel curve , econometrics , bayesian probability , zero (linguistics) , mathematics , consumption (sociology) , statistics , bayes estimator , monte carlo method , markov chain , economics , price index , linguistics , philosophy , social science , discrete mathematics , sociology
The objective of this article is to propose a Bayesian method for estimating a system of Engel functions using survey data that include zero expenditures. We deal explicitly with the problem of zero expenditures in the model and estimate a system of Engel functions that satisfy the adding‐up condition. Furthermore, using Markov chain Monte Carlo method, we estimate unobservable parameters, including consumption of commodities, total consumption and equivalence scale, and use their posterior distributions to calculate inequality measures and total consumption elasticities.