Global restrictions on the parameters of the CDES indirect utility function |
| |
Authors: | Bjarne S Jensen Paul de Boer Jan van Daal Peter S Jensen |
| |
Institution: | 1.Department of Environmental and Business Economics,University of Southern Denmark,Esbjerg,Denmark;2.Econometric Institute,Erasmus University Rotterdam,Rotterdam,The Netherlands;3.TrianGle,Universite de Lyon-2,Lyon,France;4.Department of Business and Economics,University of Southern Denmark,Odense,Denmark |
| |
Abstract: | This paper extends the analytical and empirical application of the basic indirect utility function of Houthakker–Hanoch—called
the CDES specification (constant differences of elasticities of substitution). The non-homothetic CDES preferences are the
natural parametric extension on the global domain of the homothetic CES preferences with many commodities, and CDES can conveniently
be used in specifying CGE multisector models with a demand side satisfying observable Engel curve patterns. Moreover, all
Marshallian own-price elasticities are no longer restricted to exceed one, and positive and negative cross-price effects are
allowed for in empirical demand analyses. Explicit calculations of the Allen elasticities of substitution are instrumental
in demonstrating the economic implications of the parameters of indirect utility functions with global regularity properties
and flexibility of the derived demand systems. |
| |
Keywords: | |
本文献已被 SpringerLink 等数据库收录! |
|