2011,01: The rank of a system of engel curves : how many common factors?

摘要: By representing a system of budget shares as an approximate factor model we determine its rank, i.e. the number common functional forms, or factors, spanning space Engel curves. Once factors are estimated via principal components, identify them by imposing statistical independence. Finally, means parametric and non-parametric regressions estimate functions total expenditure. Using data from U.K. Consumption Expenditure Survey 1968 to 2006, find evidence three forms which correspond decreasing, increasing almost constant The household consumption behavior is therefore driven respectively related necessities (e.g. food), luxuries vehicles), goods allocated same percentage both in rich poor households housing).