Summary
The objective of this paper is to analyze the structure of consumer preferences and changes in preferences over time. Consumer preferences are represented by an indirect translog utility function with time-varying preferences that is quadratic in the logarithms of its arguments. We consider a system of demand functions associated with parameter restrictions consistent with the theory. We characterize groupwise separability and groupwise homotheticity of preferences and derive for each set of restrictions on preferences parametric restrictions on the corresponding system of demand functions. Empirical results of the tests, based on time series data for FRG consumption expenditures on three commodity groups — durables, non-durables, and energy — are presented.
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Conrad, K., Jorgenson, D.W. The structure of consumer preferences, Federal Republic of Germany, 1950–1973. Zeitschr. f. Nationalökonomie 38, 1–28 (1978). https://doi.org/10.1007/BF01290057
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DOI: https://doi.org/10.1007/BF01290057