THE CALIBRATION OF INCOMPLETE DEMAND SYSTEMS IN QUANTITATIVE ANALYSIS

We introduce an easily implemented and flexible calibration technique for partial demand systems, combining recent developments in incomplete demand systems and a set of restrictions conditioned on the available elasticity estimates. The technique accommodates various degrees of knowledge on cross-price elasticities, satisfies curvature restrictions, and allows the recovery of an exact welfare measure for policy analysis. The technique is illustrated with a partial demand system for food consumption in Korea for different states of knowledge on cross-price effects. The consumer welfare impact of food and agricultural trade liberalization is measured.


Issue Date:
2003
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/18462
Total Pages:
18
Series Statement:
CARD Working Paper 03-WP 324




 Record created 2017-04-01, last modified 2017-04-04

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