Economics and Information Theory

Two decades after its original publication, The Analysis of Household Surveys is reissued with a new preface by its author, Sir Angus Deaton, recipient of the 2015 Nobel Prize in Economic Sciences. This classic work remains relevant to anyone with a serious interest in using household survey data to shed light on policy issues. This book reviews the analysis of household survey data, including the construction of household surveys, the econometric tools useful for such analysis, and a range of problems in development policy for which this survey analysis can be applied. The author's approach remains close to the data, using transparent econometric and graphical techniques to present data in a way that can clearly inform policy and academic debates. Chapter 1 describes the features of survey design that need to be understood in order to undertake appropriate analysis. Chapter 2 discusses the general econometric and statistical issues that arise when using survey data for estimation and inference. Chapter 3 covers the use of survey data to measure welfare, poverty, and distribution. Chapter 4 focuses on the use of household budget data to explore patterns of household demand. Chapter 5 discusses price reform, its effects on equity and efficiency, and how to measure them. Chapter 6 addresses the role of household consumption and saving in economic development. The book includes an appendix providing code and programs using STATA, which can serve as a template for the users' own analysis.

The analysis of household surveys

Immigrants' ties to their home countries can play a key role in fostering bilateral trade linkages. Immigrant ties include knowledge of home-country markets, language, preferences, and business contacts that have the potential to decrease trading transaction costs. Empirical results for the United States suggest that immigrant links have historically been important in increasing bilateral trade flows with immigrants' home countries. Copyright 1994 by MIT Press.

Immigrant links to the home country: empirical implications for u.s. bilateral trade flows

The growth of world trade: tariffs, transport costs, and income similarity

Recent developments in the econometric estimation of frontiers

The changing structure of consumer preferences is viewed in this study as it evolves in a developing economy. Broad patterns in household demand and saving are identified using national accounts data for seventeen countries which span the development spectrum; per capita GNP is used as a classification index. Economic development is multidimensional, accompanied by phenomena such as urbanization, structural shifts in the composition of output and employment, and changes in the age structure and composition of the family. In order to take account of these aspects of economic development the authors also examine how demand and savings parameters respond to change in a number of socioeconomic and demographic variables, using household budget data from eight developing countries. The extended linear expenditure system is used as a model to estimate the responsiveness of both demand and saving to the allocation of total consumption expenditure at the margin, that is, marginal budget shares; to price and total expenditure elasticities; to marginal and average propensities to save; and to the elasticities of household saving with respect to changes in relative prices. Particular attention is paid to differences between rural and urban income and expenditures, and the central role of food prices. The authors also estimate parameters which may be said to represent subsistence expenditures.

Patterns in Household Demand and Saving

IN THIS PAPER we define the elasticity of transformation analogously with the elasticity of substitution. We derive the family of CET (constant elasticity of transformation) production possibility schedules which (not surprisingly) turn out to be algebraically identical with CES isoquants, apart from a difference of sign determining their concavity.2 We show that a given, constant, elasticity of transformation is compatible with product-neutral and product-biased shifts in the location of the frontier, pointing out that CET model therefore is of potential value in the analysis of technical change.3 Finally, we suggest a possible application of the CET model in the empirical analysis of supply, quoting by way of illustration the results of an empirical three-sector agricultural supply model fitted to post war Australian data.

The constant elasticity of transformation production frontier and linear supply system

The problem of endowing large applied general equilibrium models with numerical values for parameters is formidable. For example, a complete set of own- and cross-price elasticities of demands for the MONASH model of the Australianeconomy involves in excess of 50000 items. Invoking the minimal assumptions that demand is generated by utility maximization reduces the load to about 26000 - obviously still a number much too large for unrestrained econometric estimation. To obtain demand systems estimates for a dozen or so generic commodities at a top level of aggregation (categories like ‘food’, ‘clothing and footwear’, etc.), typically Johansen's lead has been followed, and directly additive preferences imposed upon the underlying utility function. With the move beyond one-step linearized solutions of applied general equilibrium models, the functional form of the demand system adopted becomes an issue. The most celebrated of the additive-preference demand systems, the linear expenditure system (LES), has one...

An implicitly additive demand system

https://vi.unctad.org/tda/papers/Research%20Questions_Sam/Impact%20of%20GE%20modelling%20on%20Australian%20Policy%20g-98.pdf

Alan A. Powell

Papers

Patterns in Household Demand and Saving

The constant elasticity of transformation production frontier and linear supply system

An implicitly additive demand system

The contribution of applied general equilibrium analysis to policy reform in Australia

The estimation of supply response in Australian agriculture: the CRESH/CRETH production system.