Final Exam 2000 - Statistics for Food and Resource...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Statistics for Food and Resource Economics Final 2000 1. One commonly estimated model of consumer demand is the differential model. In this model, share weighted logarithmic changes in consumption are regressed on logarithmic changes in income and logarithmic changes in the price for each good. Mathematically, the model can be written as: () () () it m j jt ij t i it it p D Q D q D w επ θ + + = = 1 where w it is the budget share of good i, D(q it ) is the logarithmic change in quantity ( ln(q it )-ln(q it-1 ) ), D(Q t ) is the logarithmic change in income, and D(p jt ) are the logarithmic change in the price of each good. While this analysis is usually estimated as a system, assume that you want to estimate this model for food in the United States between 1966 and 1996 (note that one year is dropped because due to differencing). The exact form of the model estimated is () ( ) ( ) ( ) ( ) ( )( ) t t t t t t t t t p D p D p D p D p D Q D q D w ε π α + + + + + + + = 5
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 2

Final Exam 2000 - Statistics for Food and Resource...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online