Total expenditure endogeneity in a system of demand for public consumption expenditures in the UK
Pitarakis, Jean-Yves and Tridimas, George (1999) Total expenditure endogeneity in a system of demand for public consumption expenditures in the UK. Economic Modelling, 16, (2), 279-291. (doi:10.1016/S0264-9993(98)00043-1).
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Contrary to standard empirical studies of demand for public consumption expenditure a system of demand equations is examined where the total expenditure variable is considered endogenous in the sense that it is correlated with the equation errors. Using a recently available UK dataset we explore alternative specifications of an auxiliary equation for total expenditure, which depend on prices and other instrumental variables, and apply a Hausman-type and a likelihood ratio test of exogeneity. The results reject exogeneity and suggest that when endogeneity of total expenditure is taken into account the constraints of homogeneity and symmetry cannot be rejected.
|Digital Object Identifier (DOI):||doi:10.1016/S0264-9993(98)00043-1|
|Keywords:||demand systems, public expenditure, endogeneity|
|Subjects:||H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
H Social Sciences > HF Commerce > HF5601 Accounting
|Divisions:||University Structure - Pre August 2011 > School of Social Sciences > Economics
|Date Deposited:||09 Feb 2011 09:56|
|Last Modified:||31 Mar 2016 13:32|
|RDF:||RDF+N-Triples, RDF+N3, RDF+XML, Browse.|
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