A rational rank four demand system

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A Rational Rank Four Demand System

Past parametric tests of demand system rank employed polynomial Engel curve systems. However, by Gorman’s (1981) theorem, the maximum possible rank of a utility derived polynomial demand system is three. The present paper proposes a class of demand systems that are utility derived, are close to polynomial, and have rank four. These systems nest rational polynomial demands, and so can be used to...

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ژورنال

عنوان ژورنال: Journal of Applied Econometrics

سال: 2003

ISSN: 0883-7252,1099-1255

DOI: 10.1002/jae.677