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Food Demand and Savings in a Complete, Extended, Linear Expenditure System

Food Demand and Savings in a Complete, Extended, Linear Expenditure System Food Demand and Savings in a Complete, Extended, Linear Expenditure System David B. Eastwood and John A. Craven Demand equations derived from the classical, con­ preference ordering can be represented by the strained, utility-maximization problem state that Klein-Rubin utility function, and that (b) he allo­ quantities demanded are functions of all prices and cates income among n consumption categories and an (n+ l)th category that is savings. Stated in math­ income. An implication is that consumer purchase decisions are interrelated and should be viewed ematical terms, the consumer's maximization prob­ from a systems context. Recent economic events lem is as follows: n+1 have focused attention on the high prices of energy, (1) maximize U = I,J'J log (Xi - Yi), medical services, food, and housing, as well as the i=1 low level of consumer savings. Such concerns make n+1 it desirable that we have estimates of a set of pa­ (2) subject to IPiXi = y, rameters which will allow inferences to be made i=1 about the probable response of food demand and where U is utility, thex's are quantities, thep's are savings to changes in consumer income and a com­ prehensive set of consumer prices. prices, y is http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Journal of Agricultural Economics Wiley

Food Demand and Savings in a Complete, Extended, Linear Expenditure System

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References (3)

Publisher
Wiley
Copyright
© Agricultural and Applied Economics Association
ISSN
0002-9092
eISSN
1467-8276
DOI
10.2307/1240546
Publisher site
See Article on Publisher Site

Abstract

Food Demand and Savings in a Complete, Extended, Linear Expenditure System David B. Eastwood and John A. Craven Demand equations derived from the classical, con­ preference ordering can be represented by the strained, utility-maximization problem state that Klein-Rubin utility function, and that (b) he allo­ quantities demanded are functions of all prices and cates income among n consumption categories and an (n+ l)th category that is savings. Stated in math­ income. An implication is that consumer purchase decisions are interrelated and should be viewed ematical terms, the consumer's maximization prob­ from a systems context. Recent economic events lem is as follows: n+1 have focused attention on the high prices of energy, (1) maximize U = I,J'J log (Xi - Yi), medical services, food, and housing, as well as the i=1 low level of consumer savings. Such concerns make n+1 it desirable that we have estimates of a set of pa­ (2) subject to IPiXi = y, rameters which will allow inferences to be made i=1 about the probable response of food demand and where U is utility, thex's are quantities, thep's are savings to changes in consumer income and a com­ prehensive set of consumer prices. prices, y is

Journal

American Journal of Agricultural EconomicsWiley

Published: Aug 1, 1981

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