Re: st: Dynamic almost ideal demand system

[Nigussie Tefera <nigussie.tefera@gmail.com>]

Hi Jorge,

Thanks a lot for your suggestion.

Yes, I am exactly referring to Ray (1984) A dynamic generalization of
the almost ideal demand system but forget to put under quotation. I
should have to write it as In " A dynamic generalization of the almost
ideal demand system", by Ray (1984) ....

Best

Nigussie

On Sat, Mar 8, 2014 at 1:24 AM, Jorge Eduardo Pérez Pérez
<jorge_perez@brown.edu> wrote:
> I got confused by the paper by Ray in a previous thread. You provided
> the full reference for
>  here but it did not look like so. Should have been
>
> Ray (1984) A dynamic generalisation of the almost ideal demand system
>
> In any case, I looked at the papers Ray cites in the first paragraph
> and both base inclusion of the lagged values of expenditures on habit
> formation equations formulated in levels, so to be strictly consistent
> with those papers the lagged values should be included in levels.
>
> Including them in logs may make more econometric sense and provide a
> better fit, but it will not be strictly consistent with those papers.
> You should think whether the habit formation equations can be
> rewritten such that the demand equations include lagged log
> consumption, by a change of scale in coefficients perhaps. If so,
> there shouldn't be a problem.
>
>
>
>
>
>
> --------------------------------------------
> Jorge Eduardo Pérez Pérez
> Graduate Student
> Department of Economics
> Brown University
>
>
> On Fri, Mar 7, 2014 at 4:49 PM, Nigussie Tefera
> <nigussie.tefera@gmail.com> wrote:
>> Dear stat list
>>
>> In a dynamic generalization of the the almost ideal demand system,
>> Ray(1984) modeled total food expenditure in log terms (lntfexp) whilst
>> its lag without log transformation (tfexp_1); also lag of expenditure
>> for each food groups is without long transformation. For practical
>> estimation, I want to make sure whether the log or alternative
>> (absolute terms) should be considered or not. Your suggestion is very
>> welcome.
>>
>>
>> Best
>>
>> Nigusise
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