This paper uses a Box-Cox generalization of the Almost Ideal Demand System (AIDS). The AIDS model is nested within a framework utilizing Box-Cox transformations of price and income variables, but restricts all prices to have the same transformed coefficient. This study uses the Consumer Expenditure Survey (CES) and Consumer Price Index (CPI) for the empirical application. Aggregate commodity group price and income elasticities from the Box-Cox-AIDS and AIDS specifications are examined to assess the empirical difference between the two. Motor fuel price elasticities are also considered for two time periods to detect the presence of a shift in the short run price elasticities. This study finds statistically significant differences in roughly half of the price and income elasticities calculated from the two models, and that the two models yield different estimates for motor fuel price elasticity in the two time periods considered.
|Commitee:||Goodhue, Rachael, Green, Richard|
|School:||University of California, Davis|
|Department:||Agricultural and Resource Economics|
|School Location:||United States -- California|
|Source:||MAI 50/03M, Masters Abstracts International|
|Keywords:||Consumer demand, Demand system estimation, Motor fuel elasticity|
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