Dienstag, 10. September 2013

Estimating consumer demand for Austria


I just finished my first thesis. You can download it here: https://dl.dropboxusercontent.com/u/19155359/DA1.pdf 


Estimating consumer demand for Austria

Abstract Prices and income impact consumption patterns. I estimate an Almost Ideal Demand System (AIDS) for 12 broadly defined consumer goods (COICOP) for the countries Austria, Finland, Denmark, Norway, and the Netherlands. Focusing on Austria, I find expenditure elasticities vary between 0 and 3, which shows how diverse the effects of income on consumption are. Own price elasticities vary between -2.6 and 0, revealing the different opportunities of consumers to substitute goods when prices change. I also find that a simple log-log model yields similar own price elasticities than the AIDS model. Whenever only own price elasticities and expenditure elasticities are of interest a simple log-log model is an easier to estimate alternative. The AIDS model gives additional insights into cross price elasticities and allows to evaluate how elasticities have changed over time.

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