American Journal of Agricultural Economics · 1995 · 404 citations · 2 references
Social SciencesBusiness EconomicsEconomicsEconometricsMicroeconomicsPricing TheoryConsumer Demand AnalysisDemand AnalysisDemand TheoryMeasurement EstimationApproximation ErrorApproximation PropertiesConsumer Demand SystemsDemand Elasticity ModelingDemand EstimationEconometric Demand ModelsLinear ModelsPrice Elasticity Modeling
Abstract The Stone index typically used in estimating linear almost ideal demand systems is not invariant to changes in units of measurement, which may seriously affect the approximation properties of the model. A modification to the Stone index, or use of a regular price index instead, are both desirable practices in estimating linear AI models.
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