Open AccessEstimating a global MAIDADS demand system considering demography, climate and norms
Author(s) -
Wolfgang Britz
Publication year - 2022
Publication title -
bio-based and applied economics
Language(s) - English
Resource type - Journals
eISSN - 2280-6180
pISSN - 2280-6172
DOI - 10.36253/bae-10488
Subject(s) - commodity , gini coefficient , economics , population , engel curve , econometrics , computable general equilibrium , rank (graph theory) , inequality , islam , economic inequality , microeconomics , geography , mathematics , price index , demography , sociology , finance , mathematical analysis , archaeology , combinatorics
Based on data mainly from the International Comparison Program for 156 countries, we conduct a global cross-sectional estimation of an extended rank-3 MAIDADS demand system for nineteen commodity groups including agri-food detail for integration in a Computable General Equilibrium model. We render both marginal budget shares and commitment terms depending on the implicit utility level and consider age shares on the population, the Gini-Coefficient, the share of Islamic population, a sea access indicator and mean temperatures as further explanatory variables. We find that especially demographic factors, the share of Islamic population and mean temperature considerably improve model selection statistics and the fit of commodity groups with a low fit in a variant where prices and income only are used. Graphics of the estimated Engel curves, with details for agro-food commodity groups, highlight income dynamics of budget shares.