Abstract
Since the pioneering work of Engel, Engel curves have become an integral part in many areas of consumption economics. Early studies on the analysis of household expenditures, however, mainly used linear Engel curves. The poor performance of these linear forms of Engel curves led researchers to investigate other functional forms to estimate Engel curves. A majority of the recent work on Engel function estimations has made allowances for household size and compositional differences by introducing an additional variable on household size into the Engel curve specification together with household expenditure. The conventional approach of estimating the income elasticities is to select an appropriate functional form, such as linear, log-linear or log-log for each commodity to estimate Engel curves and then to use the estimated parameters to obtain the income elasticity estimates at any level of household income. However, the use of cross-sectional data to estimate demand equations and thereby demand elasticities partly simplifies the estimation.
Original language | English |
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Title of host publication | Household Demand for Consumer Goods in Developing Countries |
Subtitle of host publication | A Comparative Perspective with Developed Countries |
Editors | Selva Selvanathan, Saroja Selvanathan, Maneka Jayasinghe |
Place of Publication | London |
Publisher | Routledge Taylor & Francis Group |
Chapter | 5 |
Pages | 1-56 |
Number of pages | 56 |
Edition | 1 |
ISBN (Electronic) | 9780429200120 |
Publication status | Published - 2022 |