Estimating a demand system with nonnegativity constraints: Mexican meat demand

A new information-based approach for estimating systems of many equations w ith nonnegativity constraints is presented. This approach, called generaliz ed maximum entropy (GME), is more practical and efficient than traditional maximum-likelihood methods. The GME method is used to estimate an almost id eal demand system for five types of meat using cross-sectional data from Me xico, where most households did not buy at least one type of meat during th e survey week. The system of demands is shown to vary across demographic gr oups.