HOGLEX demand systems and welfare analysis: a Bayesian analysis with household expenditure unit records
by
Hikaru Hasegawa
Faculty of Economics and Business Administration, Hokkaido University, JAPAN
Coauthors: Tran Van Hoa (Department of Economics, University of Wollongong, AUSTRALIA), Rebecca Valenzuela (Faculty of Business and Economics, Monash University, AUSTRALIA)

The HOGLEX demand system (Tran Van Hoa [1983,1985]) of the Box-Cox transformation type is integrable and completely general in the sense that it is based on utility maximization and encompasses all other well-known class 2 demand systems (eg, LINEX, AIDS) in the literature on consumer behaviour (Laitinen et al. [1983]). The HOGLEX studies to date have been focused on studies of consumption patterns and based mainly on conventional OLS or MLE methods and panel aggregate price and income data. The paper elaborates on three important subsets of the HOGLEX demand system and, using household expenditure unit records from two major ASEAN countries (ie, Thailand and the Philippines), estimates by the Bayesian method these subsets for a number of socio-demographic cohorts and, importantly, discusses their implications for policy designs in welfare analysis and social security maintenance systems. We also estimate the models and their findings with measurement errors in total expenditure and compare the results with those without measurement errors.

Date received: October 25, 2000

Copyright © 2000 by the author(s). The author(s) of this document and the organizers of the conference have granted their consent to include this abstract in Atlas Conferences Inc. Document # cafr-74.