Why is Demand Homogeneity so Often Rejected?
Advanced studies in theoretical and applied econometricsPublished 1 January 1992
Kenneth Laitinen
Citations189
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Abstract
Several statistical tests have indicated that homogeneity of consumer demand must be rejected [see, e.g., Barten (1969), Byron (1970), Lluch (1971), and Deaton (1974)]. A simulation experiment shows that the standard test is seriously biased toward rejecting this hypothesis. For the case presented, a small sample interpretation of the test statistic explains this bias.
Keywords
Economics, Econometrics and FinanceBusiness, Management and Accounting
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