Chapter 4 The Generalized Quadratic Expenditure System

Abstract

This chapter presents the indirect preferences for all full rank Gorman and Lewbel demand systems. Each member in this class of demand models is a generalized quadratic expenditure system (GQES). This representation allows applied researchers to choose a small number of price indices and a function of income to specify any exactly aggregable demand system, without the need to revisit the questions of integrability of the demand equations or the implied form and structure of indirect preferences. This characterization also allows for the calculation of exact welfare measures for consumers, either in the aggregate or for specific classes of individuals, and other valuations of interest to applied researchers.

Citation

LaFrance, J.T. and Pope, R.D. (2009), "Chapter 4 The Generalized Quadratic Expenditure System", Slottje, D.J. (Ed.) Quantifying Consumer Preferences (Contributions to Economic Analysis, Vol. 288), Emerald Group Publishing Limited, Leeds, pp. 83-117. https://doi.org/10.1108/S0573-8555(2009)0000288007