aidsConsist function

Check Consistency of the AIDS

Check whether the specification of the AIDS is consistent with microeconomic demand theory (i.e. utility maximisation).

aidsConsist( priceNames, totExpName, coef, data,
   priceIndex = "TL", basePrices = NULL, baseShares = NULL,
   shareNames = NULL )

## S3 method for class 'aidsConsist'
print( x, ... )

## S3 method for class 'aidsEst'
checkConsist( object, observedShares = FALSE, ... )

Arguments

• priceNames: a vector of strings containing the names of the prices.
• totExpName: a string containing the variable name of total expenditure.
• coef: a list containing the coefficients alpha, beta, gamma, and (only for the translog price index) alpha0.
• data: a data frame containing the data.
• priceIndex: a character string specifying the price index (see aidsPx) or a numeric vector providing the log values of the price index (passed to aidsMono.
• basePrices: a vector specifying the base prices for the Paasche, Laspeyres, and Tornqvist price index (passed to aidsMono.
• baseShares: a vector specifying the base expenditure shares for the Laspeyres, simplified Laspeyres, and Tornqvist index (passed to aidsMono.
• shareNames: a vector of strings containing the names of the expenditure shares (passed to aidsConcav.
• x: an object of class aidsConsist.
• object: an object of class aidsEst.
• observedShares: logical. Using observed shares? (see details).
• ...: currently not used.

Details

The checkConsist method for objects of class aidsEst

extracts all relevant elements from an object returned by aidsEst

and passes them as arguments to aidsConsist. The optional argument observedShares determines whether fitted (default) or observed expenditure shares are used in the price index of the LA-AIDS to check monotonicity and in the calculation of the subsitution matrix to check concavity.

Returns

aidsConsist and the checkConsist method return a list of class aidsConsist

that contains following elements: - addingUp: logical. Is the addinp-up condition fulfilled?

• homogeneity: logical. Is the homogeneity condition fulfilled?

• symmetry: logical. Is the symmetry condition fulfilled?

• mono: an object returned by aidsMono.

• concav: an object returned by aidsMono

  (only if the symmetry condition is fulfilled and the translog price index is used, i.e. argument priceIndex is "TL".

References

Deaton, A.S. and J. Muellbauer (1980a) An Almost Ideal Demand System. American Economic Review, 70, p. 312-326.

Deaton, A.S. and J. Muellbauer (1980b) Economics and Consumer Behavior, Cambridge University Press, Cambridge.

Author(s)

Arne Henningsen

See Also

aidsEst

Examples

data( Blanciforti86 )
   # Data on food consumption are available only for the first 32 years
   Blanciforti86 <- Blanciforti86[ 1:32, ]

   priceNames <- c( "pFood1", "pFood2", "pFood3", "pFood4" )
   shareNames <- c( "wFood1", "wFood2", "wFood3", "wFood4" )

   estResult <- aidsEst( priceNames, shareNames, "xFood",
      data = Blanciforti86, method = "IL" )
   aidsConsist( priceNames, "xFood", data = Blanciforti86,
      coef = estResult$coef )

   # the same can be obtained in an easier way
   checkConsist( estResult )