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On the Functional Form of Engel Curves: The Australian Household Expenditure Survey 1975–76 *
Author(s) -
BEWLEY R. A.
Publication year - 1982
Publication title -
economic record
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.365
H-Index - 42
eISSN - 1475-4932
pISSN - 0013-0249
DOI - 10.1111/j.1475-4932.1982.tb00351.x
Subject(s) - engel curve , economics , econometrics , class (philosophy) , goodness of fit , mathematics , consumer expenditure survey , statistics , public economics , aggregate expenditure , price index , computer science , artificial intelligence
This paper considers the properties of a class of models which is based on the Addilog demand system. These models not only fulfil the adding‐up criterion but also ensure that the predicted expenditures are non‐negative and a subset of these models permits the existence of saturation levels for certain commodities. A goodness of fit comparison between this class and other systems of Engel curves favours the Addilog model. The estimated expenditure elasticities compare favourably with previous estimates of Australian household expenditure patterns and it is observed that the elasticities for health and alcohol and tobacco expenditures have decreased substantially from their levels in the late 1960s.