- Title
- A Comment on Consumer Demand Systems with Binding Non-Negativity Constraints
- Author(s)
- Michael R. Ransom Michael Ransom (University of Ariizona and Princeton University)
- Abstract
- Wales and Woodland (1983) have proposed an econometric model to deal with non-negativity constraints in systems of demand equations. This paper points out the relationship between the Wales-Woodland model and the "simultaneous Tobit" model of Amemiya (1974). This relationship is important because Amemiya has proposed a simple estimation procedure that can be utilized for some cases of the Wales-Woodland model. The issue of internal consistency for models of this type is discussed. I point out that internal consistency for the Wales-Woodland model is equivalent to the second order condition for systems without quantity constraints.
- Creation Date
- 1985-06
- Section URL ID
- IRS
- Paper Number
- 192
- URL
- https://dataspace.princeton.edu/bitstream/88435/dsp016q182k145/1/192.pdf
- File Function
- Jel
- Keyword(s)
- constraints, limited dependent variables, demand system
- Suppress
- false
- Series
- 1