Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/295094 
Year of Publication: 
2001
Series/Report no.: 
Texto para Discussão No. 793
Publisher: 
Instituto de Pesquisa Econômica Aplicada (IPEA), Brasília
Abstract: 
In this study we estimate the Brazilian consumer demand system through family expenditure data, which cover all consumption categories. The model is estimated from family-level expenditures on seven consumption categories, and a new set of regional cost-of-living indexes. The sources for expenditures are the national expenditure surveys conducted in 1986/87 and 1995/96, which collected data from 11 metropolitan areas. Corresponding price indexes were constructed from detailed commodity prices, also from each metropolitan area. The salient features of our study are: a) price variations come from both time and regional differences, which allows us to estimate price elasticities with high precision; b) we have large variations in income (total expenditures) which is rarely available in aggregated data; and c) we can control for time specific factors by exploiting the panel structure of the data set. Contrary to the rule of thumb in empirical studies of demand systems, the estimation results display consistency with demand theory, and elasticity estimates are close to economic common sense. The estimated system will serve as a microeconomic basis for evaluating various policy-related issues.
Subjects: 
Consumer demand System
Almost Ideal Demand System
Brazilian family expenditures
JEL: 
C33
C81
D12
Document Type: 
Working Paper

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