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Cross Entropy Estimation of the Almost Ideal Demand System for Greek Consumption
Author(s) -
Balcombe K.,
Rapsomanikis G.,
Klonaris S.
Publication year - 2003
Publication title -
journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.157
H-Index - 61
eISSN - 1477-9552
pISSN - 0021-857X
DOI - 10.1111/j.1477-9552.2003.tb00071.x
Subject(s) - almost ideal demand system , entropy (arrow of time) , econometrics , mathematics , economics , statistics , thermodynamics , demand management , physics , macroeconomics
Cross entropy is used to estimate the Almost Ideal Demand System for consumption in Greece. The entropy estimates are found to improve upon the SUR estimates. It is recommended that practitioners consider employing entropy based procedures in systems where the data set is small, where there are a large number of parameters, or where the data are deficient.