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The Structure of Food Demand: Interrelatedness and Duality
Author(s) -
Heien Dale M.
Publication year - 1982
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 - 10.2307/1241125
Subject(s) - multicollinearity , homogeneity (statistics) , econometrics , duality (order theory) , mathematical economics , economics , additive function , mathematics , microeconomics , statistics , regression analysis , discrete mathematics , mathematical analysis
This paper presents a new empirical demand system which mitigates the effects of multicollinearity while facilitating the measurement of interrelatedness. Duality theory is used to derive the inverse demand functions. Using data on fourteen food items a complete set of demand equations is estimated in both quantity and price dependent forms. The model is used to test for the theoretical restrictions of homogeneity, additivity and negativity, as well as the habit formation hypothesis. A comparison is made between these results and those of Brandow and George and King.