Pooling international consumption data

• Published in: The review of economics and statistics Vol. 69; no. 1; pp. 90 - 99
• Main Authors: Pollak, R.A, Wales, T.J
• Format: Journal Article
• Language: English
• Published: Cambridge, Mass Elsevier Science Publishers B.V. (North-Holland) 01-02-1987; Harvard University Press, etc; MIT Press Journals, The
• Subjects: Applications; Billiards; Consumer information; Consumer prices; Consumption; Countries; demand elasticities; demand functions; Econometrics; Exchange rates; food consumption; Food security; Law of one price; Mathematical independent variables; Parity; purchasing; Purchasing power; Ratio test; Statistical analysis; Statistical data; Studies; supply balance; Utility functions; Belgium; United Kingdom > UK; United States > US
• ISSN: 0034-6535; 1530-9142
• DOI: 10.2307/1937905

Pooling consumption data from different countries for demand system estimation is attractive because it increases both sample size and the range of variation of relative prices and income. The major objection to pooling is that different countries may have different demand system parameters. This paper proposes and estimates specifications that permit pooling while allowing both short-run and long-run demand systems to differ across countries. Using data from Belgium, the United Kingdom and the United States, we find that, although pooling was accepted for some pairs of countries and some specifications, it was rejected for most. We conclude that caution is appropriate in pooling international consumption data.