[R] linear expenditure model

Marie Vandresse vm at plan.be
Mon Oct 13 09:14:23 CEST 2008

I have already used  aidsEst() function in the micEcon package for the 
estimation of elasticities.

But with the LES, I plan to estimate the minimal consumption 
level...which is not possible with the AIDS model, do I?

Arne Henningsen wrote:
> Hi Marie!
> On Friday 10 October 2008 12:40:23, Marie Vandresse wrote:
>> I would like to estimate a linear expendire with Systemfit package.
>> (method: "SUR")
> If I remember correctly, the "linear expenditure system" (LES) is linear in 
> income but non-linear in the parameters. Hence, you have to estimate a system 
> of non-linear equations. Unfortunately, the nlsystemfit() function in the 
> systemfit package that estimates systems of non-linear equations is still 
> under development and has convergence problems rather often. Since the 
> systemfit() function in the systemfit package that estimates systems of 
> linear equations is very reliable [1], I suggest that you choose a demand 
> system that is linear in parameters (e.g. the Almost Ideal Demand System, 
> [1] http://www.jstatsoft.org/v23/i04
>> As someone could show me how to define the equations?
> If you use the aidsEst() function in the micEcon package [2], you don't have 
> to specify the equations of the Almost Ideal Demand System yourself.
> [2] http://www.micEcon.org
> Best wishes,
> Arne

Marie Vandresse

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