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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Description/Abstract
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.
| Item Type: | Article |
|---|---|
| ISSNs: | 0264-9993 (print) 1873-6122 (electronic) |
| 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 |
| Item ID: | 173937 |
| Date Deposited: | 09 Feb 2011 09:56 |
| Last Modified: | 01 Jun 2011 17:48 |
| Contributors: | Pitarakis, Jean-Yves (Author) Tridimas, George (Author) |
| Date: | 1 April 1999 |
| Status: | Published |
| URI: | http://eprints.soton.ac.uk/id/eprint/173937 |
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