Forms of Scale Curves and Differential Inverse Demand Systems

This article provides a new interpretation of the scale effects in differential inverse demand systems. A scale curve is defined as a curve that shows how the expenditure share of a good or service changes as the consumption level changes. It is shown that Brown, Lee, and Seale's synthetic model has the same scale effects as do the Box-Cox scale curves. In this light, their model is not a mere composite but a model in its own right. An empirical illustration given for Japanese fresh food demand suggests that the underlying scale curves differ from both linear and loglinear forms. Copyright 2005, Oxford University Press.