Determining the impacts on consumers of governmental policies that affect the demand for food products requires a theoretically consistent micro-level demand model. We estimate a system of demands for weekly city-level dairy product purchases by nonlinear three-stage least squares to account for...

This paper proposes a straightforward, easy to implement approximate F-test which is useful for testing restrictions in multivariate regression models. We derive the asymptotics for our test statistic and investigate its finite sample properties through a series of Monte Carlo experiments. Both...

Do milk marketing orders affect various demographic groups differently? To answer this question, we use supermarket scanner data to estimate an incomplete demand system for dairy products. We use these estimates to simulate substitution among dairy products and the welfare impacts of price...

Gorman’s theory of demand is extended comprehensively to incomplete systems. The incomplete systems approach dramatically increases this class of models. The separate roles of symmetry and adding up are identified in the rank and the functional form of this class of models. We show that...

Engineering models generally find that most consumers are unwilling to adopt energy efficient appliances, even though the financial returns are positive. It is commonly thought that this is either due to market imperfections such as an incomplete credit market, very high intertemporal consumer...

We apply an incomplete demand system to supermarket scanner data to estimate the effects of a fat tax on dairy products for different demographic groups. We find own-price elasticities of demand are relatively inelastic and vary little across groups. A fat tax may be an effective means to raise...

Diminishing marginal utility is neither necessary nor sufficient for downward sloping demand. Yet upper-division undergraduate and beginning graduate students often presume otherwise. This paper provides two simple counter examples that can be used to help students understand that the Law of...

Diminishing marginal utility (DMU) is neither necessary nor sufficient for downward-sloping demand. Yet, upper-division undergraduate and beginning graduate students often presumeotherwise. This paper provides two simple counter-examples that can be used to help students understand that the Law...

Theil's theory of rational random errors is sufficient for strict exogeneity of group expenditure in separable demand models. Generalized rational random errors is necessary and sufficient for strict exogeneity of group expenditure. A simple, robust, asymptotically normal t-test of this...

Gorman Engel curves are extended to incomplete systems. The roles of Slutsky symmetry and homogeneity/adding up are isolated in the rank and functional form restrictions for Gorman systems. Symmetry determines the rank condition. The maximum rank is three for incomplete and complete systems....