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- Title
FULL RANK DEMAND SYSTEMS.
- Authors
Lewbel, Arthur
- Abstract
Gorman (1981) showed that the matrix of coefficients of Engel curves for demands that are linear in functions of nominal income is at most rank three. This paper completely characterizes all such demands that are "full rank." i.e., have rank equal to the number of columns of this matrix, and explains the usefulness of full rank models. Generalizations of Gorman Engel curves that attain rank higher than three are discussed. One generalization is deflated income models, which are almost as convenient as Gorman Engel curves, but can attain rank fore'. Another generalization shows how demands of arbitrary rank can be constructed, though such demands are likely to be impractical for empirical use.
- Subjects
ENGEL'S law; ECONOMIC demand
- Publication
International Economic Review, 1990, Vol 31, Issue 2, p289
- ISSN
0020-6598
- Publication type
Article
- DOI
10.2307/2526840