Total expenditure endogeneity in a system of demand for public consumption expenditures in the UK
Total expenditure endogeneity in a system of demand for public consumption expenditures in the UK
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.
demand systems, public expenditure, endogeneity
279-291
Pitarakis, Jean-Yves
ee5519ae-9c0f-4d79-8a3a-c25db105bd51
Tridimas, George
d0bae498-e46d-49f2-a896-be8410840e44
1 April 1999
Pitarakis, Jean-Yves
ee5519ae-9c0f-4d79-8a3a-c25db105bd51
Tridimas, George
d0bae498-e46d-49f2-a896-be8410840e44
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), .
(doi:10.1016/S0264-9993(98)00043-1).
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.
This record has no associated files available for download.
More information
Published date: 1 April 1999
Keywords:
demand systems, public expenditure, endogeneity
Identifiers
Local EPrints ID: 173937
URI: http://eprints.soton.ac.uk/id/eprint/173937
ISSN: 0264-9993
PURE UUID: 817da5a8-ecad-439e-b3cb-4b0b0a975408
Catalogue record
Date deposited: 09 Feb 2011 09:56
Last modified: 14 Mar 2024 02:48
Export record
Altmetrics
Contributors
Author:
George Tridimas
Download statistics
Downloads from ePrints over the past year. Other digital versions may also be available to download e.g. from the publisher's website.
View more statistics
