Estimation Of The Latvian Households Almost Ideal Demand System Of Commodities

Type Conference Paper - Current Issues in Economic and Management Sciences
Title Estimation Of The Latvian Households Almost Ideal Demand System Of Commodities
Author(s)
Publication (Day/Month/Year) 2011
City Riga
Country/State Latvia
URL http://www.evf.lu.lv/fileadmin/user_upload/lu_portal/projekti/evf/konferences/Doctor_2011/Abstracts_​of_Reports_November2011.pdf#page=18
Abstract
The given research work exploits Household Budget Survey data and price indices of Central Statistical Bureau of Latvia made on 12 commodity groups according to COICOP (Classification of Individual Consumption According to Purpose) for the period 1997-2008. There is estimated Almost Ideal Demand System for 5 integrated commodity groups: “Food and non-alcoholic beverages”, “Clothing and footwear”, “Transport”, “Recreation and culture”, and “Consolidated commodity group”. For the given commodity groups expenditure elasticities of demand and price elasticities of demand are calculated. The calculated expenditure elasticities of demand allow all commodities classify as normal commodities. Elasticities calculated by the help of Almost Ideal Demand System show that by increase of welfare the expenditure elasticity of demand decreases for all commodity groups. Hereto, the expenditure elasticity of demand for food is less than 1 in all quintiles, however, the expenditure elasticity of demand for the other groups is more than 1. The expenditure elasticities of demand for the given commodity groups are compared to analogue indices of other countries also calculated by the help of Almost Ideal Demand System.

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