Moschini, GianCarlo

European Economic Review Vol. 42 (1998): 349-364.

The concept of a semiflexible functional form is applied to the almost ideal demand system. This yields a demand model that is more parsimonious than standard ones while preserving a degree of flexibility, that satisfies the curvature property of concavity of the underlying expenditure function (at least locally), and that preserves the desirable properties of the almost ideal model--aggregation across consumers and nonlinearity of the Engel curves. The model is illustrated with an application to a relatively large demand system emphasizing food consumption.