Preference heterogeneity and the rank of demand systems

Authors
Lyssiotou, P Pashardes, P Stengos, T
Citation
P. Lyssiotou et al., Preference heterogeneity and the rank of demand systems, J BUS ECON, 17(2), 1999, pp. 248-252
Citations number
16
Categorie Soggetti
Economics
Journal title
JOURNAL OF BUSINESS & ECONOMIC STATISTICS
ISSN journal
07350015 → ACNP
Volume
17
Issue
2
Year of publication
1999
Pages
248 - 252
Database
ISI
SICI code
0735-0015(199904)17:2<248:PHATRO>2.0.ZU;2-6
Abstract
This article examines the effect of preference heterogeneity on nonparametr ic and parametric tests of the rank of demand systems. Using samples of hou seholds drawn from the U.K. Family Expenditure Survey, we find that prefere nce heterogeneity increases the rank of demand systems. When the effects of household characteristics on demand are removed by semiparametric techniqu es, a rank-3 demand system appears to be an adequate empirical specificatio n for all samples.