Testing for negativity in a demand system: A Bayesian approach

The paper introduces Bayesian inference into a demand model. This allows us to test for the negativity condition of the substitution matrix which is difficult to handle directly in the traditional approach. To illustrate the Bayesian inference procedures, we estimate the Rotterdam model and test the demand properties using Japanese data. The empirical results show the importance of specifically considering negativity in demand analysis.

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Year of publication:	1999-05-11
Authors:	Kozumi, Hideo ; Hashimoto, Noriko ; Hasegawa, Hikaru
Published in:	Empirical Economics. - Department of Economics and Finance Research and Teaching. - Vol. 24.1999, 2, p. 211-223
Publisher:	Department of Economics and Finance Research and Teaching
Subject:	Markov chain Monte Carlo (MCMC) \| conditional predictive ordinate (CPO) \| Bayes factor \| Rotterdam model

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Extent:	application/pdf
Type of publication:	Article
Notes:	received: September 1997/final version received: February 1998
Classification:	C11 - Bayesian Analysis ; D12 - Consumer Economics: Empirical Analysis
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005382473