Journal Article

On Price Indices in the Almost Ideal Demand System

Frank Asche and Cathy R. Wessells

in American Journal of Agricultural Economics

Published on behalf of Agricultural and Applied Economics Association

Volume 79, issue 4, pages 1182-1185
Published in print November 1997 | ISSN: 0002-9092
Published online November 1997 | e-ISSN: 1467-8276 | DOI: http://dx.doi.org/10.2307/1244275
On Price Indices in the Almost Ideal Demand System

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A number of papers have discussed the relationship between the Almost Ideal Demand System (AIDS) and its linear approximation (LA/AIDS). In this paper, it is shown that if the prices in the system are normalized to one, the AIDS and LA/AIDS representations are identical at the point of normalization. Also, at the point of normalization, the expressions for price and expenditure elasticities from both systems are identical.

Keywords: Almost Ideal Demand System; elasticities; price indices; price normalization; C430; C510

Journal Article.  0 words. 

Subjects: Econometric and Statistical Methods; Special Topics ; Econometric Modelling

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