Open AccessA nutritional goods and a complete consumer demand system estimation for South Africa using actual price data
Author(s) -
Marius van Oordt
Publication year - 2016
Publication title -
suid-afrikaanse tydskrif vir ekonomiese en bestuurswetenskappe/south african journal of economic and management sciences
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.277
H-Index - 17
eISSN - 2222-3436
pISSN - 1015-8812
DOI - 10.4102/sajems.v19i4.1454
Subject(s) - almost ideal demand system , economics , estimation , econometrics , welfare , demand curve , sign (mathematics) , cross elasticity of demand , market demand schedule , microeconomics , demand management , price elasticity of demand , macroeconomics , mathematics , price elasticity of supply , mathematical analysis , management , market economy
Empirical analysis of South African indirect tax policy reform and the welfare consequences of such reform has been limited by a lack of reliable consumer demand system estimations. One reason for potentially unreliable demand estimations is not using actual price data in estimation. In this paper, the results of a nutritional goods demand system estimation and a complete demand system estimation are reported. Both systems were estimated with the use of the quadratic almost ideal demand system (QUAIDS) model incorporating demographic variables and using actual price and expenditure data. Subsequent to estimations, expenditure, own and cross-price elasticities of demand were calculated for both demand systems. The coefficients estimated provided largely statistical significant results and all elasticities calculated seem plausible in sign and magnitude