Demographics and demand: Evaluation of alternative functional forms
AuthorLyssiotou, Panayiota Flori
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We evaluate the role of functional form of demographics in demand analysis by proposing the GQL 'unstructured' demographically transformed model which nests the Barten-Gorman demographically modified model and popular rank-3 and rank-2 demand systems. We use UK individual data and find that the equivalence of the 'unstructured' and Barten-Gorman forms and identification of meaningful equivalence scales depend on the degree of flexibility of the demand system in demographic, price and income effects. © 2012 Elsevier B.V.