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Demographic demand systems with application to equivalence scales estimation and inequality analysis: the Australian evidence

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Blacklow, P and Nicholas, A and Ray, R (2008) Demographic demand systems with application to equivalence scales estimation and inequality analysis: the Australian evidence. Discussion Paper. University of Tasmania, Hobart, Australia.

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Abstract

This paper proposes and applies an alternative demographic procedure for extending a
demand system to allow for the effect of household size and composition changes, along with
price changes, on expenditure allocation. The demographic procedure is applied to two recent
demand functional forms to obtain their estimable demographic extensions. The estimation
on pooled time series of Australian Household Expenditure Surveys yields sensible and
robust estimates of the equivalence scale, and of its variation with relative prices. Further
evidence on the usefulness of this procedure is provided by using it to evaluate the nature and
magnitude of the inequality bias of relative price changes in Australia over a period from the
late 1980s to the early part of the new millennium.

Item Type: Report (Discussion Paper)
Keywords: Equivalence scales; Rank Three demand, Modified Almost Ideal Demand, repec System, Engel Curve
Publisher: University of Tasmania
Additional Information:

© 2008 University of Tasmania

Date Deposited: 07 Oct 2009 02:41
Last Modified: 18 Nov 2014 04:06
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