Scaling factors in estimation of time-nonseparable utility functions

Article Abstract:

Scaling factors can be used in generalized method of moments estimations to reintroduce stationarity in Euler equation residuals when data illustrate exponential trends. Scaling factors can greatly affect finite-sample estimates and can often produce spurious results if improperly chosen. When artificial data and aggregate consumption and asset returns are applied to a representative agent's time nonseparable utility function, it is evident that scaling factors need to have a roughly constant scaled marginal utility.

Economics, Research and Development in the Social Sciences and Humanities, Analysis, Estimation theory, Scaling laws (Statistical physics), Scaling laws (Mathematical physics)

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Flexible and semiflexible consumer demands with quadratic Engel curves

Article Abstract:

Three flexible consumer demand systems in which expenditures on goods are quadratic functions of income have been developed. They serve as alternatives to quadratic logarithmic forms that have been used in the modeling of rank-three demand systems. In these systems, curvature conditions can be imposed at a point without comprising their flexibility. Semi-flexible versions can also be estimated wherein the rank of the Slutsky matrix is reduced but do not restrict the price derivatives.

Models, Consumption (Economics), Demand (Economics), Engel's law

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Price-augmenting returns to scale: an application to nonseparable two-stage technologies

Article Abstract:

The "price-augmenting returns to scale" (PAR) procedure for transforming the cost function of a homogenuous technology into the cost function of a nonhomothetic one is presented. Applied to a nonseparable two-stage CES technology, the PAR procedure is very useful because additional parameters to be estimated is limited and imposing regularity conditions is direct.

Research, Costs, Industrial, Industrial costs

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