Engel’s Law states that the share of food in household expenditure declines with households’ total expenditure—a regularity that is clearly evident in Pakistani household income and expenditure data. This study uses an “Engel curve” to incorporate additional social effects—including...

This paper proposes and applies an alternative demographic procedure for extending a demand system to allow for the effect of household size and composition changes, along with price changes, on expenditure allocation. The demographic procedure is applied to two recent demand functional forms to...

The application of compositional data analysis methods in economics has some attraction. In particular, this methodology ensures that the stochastic component of budget share models will satisfy the restriction of shares to the unit simplex. The methodology relies upon the use of log-ratios in...