Bayesian model averaging in consumer demand systems with inequality constraints

C. L. Chua, W. E. Griffiths, C. J. O'Donnell

Research output: Journal PublicationArticlepeer-review

8 Citations (Scopus)


Share equations for the translog and almost ideal demand systems are estimated using Markov Chain Monte Carlo. A common prior on the elasticities and budget shares evaluated at average prices and income is used for both models. It includes equality restrictions (homogeneity, adding up and symmetry) and inequality restrictions (monotonicity and concavity). Posterior densities on the elasticities and shares are obtained; the problem of choosing between the results from the two alternative functional forms is resolved by using Bayesian model averaging. The application is to USDA data for beef, pork and poultry. Estimation of elasticities and shares, evaluated at mean prices and expenditure, is insensitive to model choice. At points away from the means, the estimates are sensitive, and model averaging has an impact.

Original languageEnglish
Pages (from-to)269-291
Number of pages23
JournalCanadian Journal of Agricultural Economics
Issue number3
Publication statusPublished - 2001
Externally publishedYes

ASJC Scopus subject areas

  • Global and Planetary Change
  • Ecology
  • Animal Science and Zoology
  • Agronomy and Crop Science
  • Economics and Econometrics


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