Easy Demand-System Estimation with Quaids
Abstract
Previously, to fit an almost-ideal demand system in Stata, one would have to use the nlsur command and write a function evaluator program as described in [R] nlsur and Poi (2008, Stata Journal 8: 554–556). In this article, I introduce the command quaids, which obviates the need for any programming by the user. The command fits Deaton and Muellbauer's (1980b, American Economic Review 70: 312–326) original almost-ideal demand-system model as well as Banks, Blundell, and Lewbel's (1997, Review of Economics and Statistics 79: 527–539) quadratic variant. Demographic variables can also be included in the model. Postestimation tools calculate expenditure and price elasticities.
6 References
Banks J., Blundell R., and Lewbel A. 1997. Quadratic Engel curves and consumer demand. Review of Economics and Statistics 79: 527–539.
Blacklow P., Nicholas A., and Ray R. 2010. Demographic demand systems with application to equivalence scales estimation and inequality analysis: The Australian evidence. Australian Economic Papers 49: 161–179.
Deaton A. S., and Muellbauer J. 1980a. Economics and Consumer Behavior. Cambridge: Cambridge University Press.
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Article first published online: September 1, 2012
Issue published: September 2012
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This article was published in The Stata Journal: Promoting communications on statistics and Stata.
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