You are here

Consumer Expenditure and Cointegration

Authors 
Pedro Duarte Neves
Publication Year 
1998
JEL Code 
C33 - Models with Panel Data
D12 - Consumer Economics: Empirical Analysis
Abstract 
In this paper we estimate the Almost Ideal Demand System (AIDS) for the Portuguese economy. The budget shares and real per capita income are found to be integrated of order one, I(1), but prices seem to be better classified as I(2). This raises new problems, as it is not possible to test for homogeneity and symmetry in a straightforward way. As cointegration is not rejected after the imposition of homogeneity and symmetry restrictions, we conclude that the AIDS is an acceptable characterisation of the Portuguese data on consumer expenditure.
Document link 
Published as 
Tags