Estimation of Demand Functions Using Cross‐Sectional Household Data: The Problem Revisited

Abstract

Abstract A procedure that corrects for selectivity bias is proposed to estimate demand functions using cross‐sectional data under the assumption that prices vary across households. This procedure, which extends the work by Cox and Wohlgenant, includes a two‐equation system of expenditure and unit value functions. This model is applied to household expenditures for beef steaks and roasts.