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A Dynamic Differential Demand System: An Application of Translation

Published online by Cambridge University Press:  28 April 2015

Mark G. Brown  and
Jong-Ying Lee
Mark G. Brown
Affiliation:
Department of Food and Resource Economics, University of Florida, Gainsville
Jong-Ying Lee
Affiliation:
Department of Food and Resource Economics, University of Florida, Gainsville
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Abstract

The differential demand system or Rotterdam model is extended to include lagged consumption through translation parameters, allowing habit and inventory effects. Applications of the model to annual U.S. expenditure and weekly juice sales data illustrate the importance of the time interval of an observation on the relative strengths of the habit inventory.

Keywords

dynamic differential demand systemtranslationhabitshousehold inventories
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 24 , Issue 2 , December 1992 , pp. 1 - 10
Copyright
Copyright © Southern Agricultural Economics Association 1992

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