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Demographic Demand Systems with Application to Equivalence Scales Estimation and Inequality Analysis: The Australian Evidence
journal contributionposted on 2023-05-17, 04:57 authored by Paul BlacklowPaul Blacklow, Nicholas, A, Ray, R
This paper proposes and applies an alternative demographic procedure for extending a demand system to allow for the effect of household size and composition changes, along with price changes, on expenditure allocation. The demographic procedure is applied to two recent demand functional forms to obtain their estimable demographic extensions. The estimation on pooled time series of Australian Household Expenditure Surveys yields sensible and robust estimates of the equivalence scale, and of its variation with relative prices. Further evidence on the usefulness of this procedure is provided by using it to evaluate the nature and magnitude of the inequality bias of relative price changes in Australia over a period from the late 1980s to the early part of the new millennium.
Publication titleAustralian Economic Papers
PublisherBlackwell Publishing Ltd
Place of publicationAustralia
Rights statementThe definitive published version is available online at: http://onlinelibrary.wiley.com/