Econometric Estimation of the Demand in Iran (A Systems Approach with the CBS Model(

In this study, we estimate a complete demand system for Iran that emphasizes main groups demand, using the CBS differential demand system specification. The results of this study, indicated 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).