Substitution, Complementarity, and the Residual Variation: Some Further Results.

An earlier paper by the author reported the results of a principal component analysis of the residual correlation matrix obtained after estimating a system of dynamic demand equations. The purpose was to verify the postulated additive nature of the utility function and to collect some information on...

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Publicado en:American Economic Review Vol. 62; no. 4; pp. 747 - 752
Autores principales: Phlips, Louis, Rouzier, Philippe
Formato: Artículo
Publicado: American Economic Association Sep72
Materias:
Acceso en línea:Ver este registro en EBSCOhost
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        atl: Substitution, Complementarity, and the Residual Variation: Some Further Results.
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          Phlips, Louis
          Rouzier, Philippe
        affil:
          Professor of Economics, Catholic University of Louvain.
          Research Assistant, University of Michigan.
      su:
        Economic demand
        Demand function
        Statistical correlation
        Utility functions
        Mathematical models of economics
        Substitution (Economics)
        Economics
      sug:
        subj:
          Economic demand
          Demand function
          Statistical correlation
          Utility functions
          Mathematical models of economics
          Substitution (Economics)
          Economics
      ab: An earlier paper by the author reported the results of a principal component analysis of the residual correlation matrix obtained after estimating a system of dynamic demand equations. The purpose was to verify the postulated additive nature of the utility function and to collect some information on possible substitution and complementarity relationships among the commodity groups. The residuals were obtained using the original Houthakker-Taylor 1966 estimation procedure. This procedure presents some advantages, but also some deficiencies. On the other hand, the correlations were interpreted on the basis of the Hicksian definitions of substitutability and complementarity, in terms of the signs of the substitution effects. The object of this article is to present some further results. First, it is of some interest to determine to what extent the results reported in the above mentioned article resist not unimportant changes in the estimation procedure. Secondly, the Hicksian definitions are rather deceptive: it is intuitively more appealing to work with the old notions of substitutability and complementarity.
      pubtype: Academic Journal
      doctype: Article
      src: R
    language: English
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