The Demand Structure of Commodity Groups in Urban Areas (With Rotterdam, CBS, Differential AIDS and NBR)

This paper survey how urban households decide on their allocation pattern, subject to budget constraints. In this paper Four-equation system of differential demand ((Rotterdam, differential AIDS, CBS and NBR) are estimated with FIML method. Also, in the estimated models imposed homogeneity and Slutsky symmetry restriction. Statistical indicators and econometric results suggest that the CBS is the best model. The results of CBS model, indicating that the expenditure elasticity of “Furniture and upholstery” and “Transportation and communication” groups are greater than one, and expenditure elasticity of “Housing group”; “Hygiene and medical care” and “Clothing and Footwear” lesser than one. Also the lowest compensated own-price elasticity and the lowest uncompensated own-price elasticity are found for Food and for “Clothing and Footwear”, respectively. From the compensated cross-price elasticities view point, some groups are Allen-Hicks complements, although the values of elasticities are small. (For example Hygiene and medical care and Food)